From now on, Ukraine has banned the import of Russian goods. The list of prohibited goods has 43 denominatons - bakery, pastry, chocolate candies, meat, fish, coffee, black tea, baby food products, filter cigarettes, beer, vodka and some other products. In this way the Ukrainian market is adapting to its European trading partners. For its own farmers the Ukrainian government has introduced VAT and the abolition of privileges for livestock.
Soon another trial awaits the trade networks. After January 10th, Russian products will have to completely disappear from the shelves. In Russia, a similar law – a ban on the import of Ukrainian products – has already begun to operate. But the scale cannot be compared, Vesti.ru reports.
Trade with Russia means more for Ukraine than does trade with Ukraine for Russia, and we are primarily talking about exports. Two or three years ago, more than a quarter of Ukrainian exports went to Russia. In contrast to Ukrainian exports, only 5% of Russia's exports went to Ukraine, the professor of the department of trade policy of the Faculty of World Economics and International Politics of the HSE Alexei Portansky said.
"This is a common policy of transnational corporations – they produce wherever it suits them in terms of production costs and in terms of logistics. Naturally, even global brands made in Russia are subject to this embargo, that is, cannot be imported to Ukraine," the economist Vsevolod Stepaniuc says.
And since the optimal prime costs of supplies will be interrupted, prices are likely to rise. Inflation in Ukraine in 2015 has already broken the twenty-year record and amounted to almost 50%, but the costs of food products are rising at a much faster pace.
For example, the Ukrainian analogue of the Russian food basket – the borsch set, which determines the growth of prices in the country – says that in 2015 the price of one of its main ingredients, beetroot, has risen 250%. Carrots and onions have increased in price even more, by about 300%. As for potatos, their price has increased by about 70%. Against this background, the increase in prices of meat and sour cream don't look so significant.
Ukrainian farmers have no time to grow vegetables. In the last year their production in the country has significantly decreased, hence the increase in prices. And in 2016, thanks to new laws that came into force on January 1st, prices for bakery products and livestock products will also increase.