Putin Retaliates: Moscow Announces Export Bans in Response to Western Sanctions
Russian President Vladimir Putin imposed an export ban on various goods and agricultural commodities in retaliation to a cascade of Western and EU sanctions.
On Thursday, Putin de facto warned that global food prices will rise even higher if the West and the EU exacerbate further economic constraints on Russia in response to its military operation in Ukraine. So, in order to shield Russians from impending food inflation, Putin decided to temporarily cut all fertilizer exports from the country as per an earlier recommendation from its trade and industry ministry, until “carriers resume rhythmic work and provide guarantees that Russian fertilizer exports will be completed in full.”
Russia accounts for a substantial portion global fertilizer supplies, having exported a total of $8.85 billion worth of fertilizer products in 2019, mostly to Brazil, China, and the US. The country’s export ban will likely pose significant implications for the upcoming growing season in the northern hemisphere, which— even before the Russia-Ukraine crisis— was battling rapidly rising fertilizer costs.
However, Putin didn’t stop his retaliation efforts there: Moscow also on Thursday banned exports of telecom, auto, medical, tech, and electrical equipment, in addition to various forestry products. “These measures are a logical response to those imposed against Russia and are aimed at ensuring uninterrupted functioning of key sectors of the economy,” said Russia’s economy ministry, as cited by Reuters.
The Russian president also ordered the country’s domestic airlines to make payments in rubles for leased aircraft, and banned them from returning the jets to foreign companies in the event their lease gets cancelled. In addition, Moscow on Thursday threatened to nationalize dormant foreign assets, in an effort to further counteract the West’s tough restrictions.
Information for this briefing was found via Reuters, OEC, CRU, and Nasdaq. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.