American farmer among the winners in sanctions-hit Russia

American farmer among the winners in sanctions-hit Russia

Here is a look at Russia one year after the Western sanctions kicked in hours before Russia’s March annexation of Crimea.

___

SANCTIONS AND INSTABILITY

Russia’s “counter-sanctions” ban on food imports has forced up prices within Russia – meaning Walker earns more for his product. But he warns that it has also made the market unstable.

“I think the sanctions do more harm to the market than good because they pervert the cost mechanism,” he said. “We have no idea what our product is supposed to cost anymore.”

“You go to one place and it says 2,000 rubles ($35) a kilo, you go to another place and it says 900 rubles a kilo. Before it was pretty understandable, you were somewhere right around 750.”

Sanctions have also thrown international projects into turmoil.

One of the main state-owned companies to be targeted by punitive measures is oil producer Rosneft. It had to postpone plans to drill in the Arctic with U.S. firm ExxonMobil. At the same time, sanctions have largely cut off state firms from international lending, making refinancing difficult, costly and a burden on the government.

However, Evgeny Gavrilenkov, chief economist at state-owned Sberbank, Russia’s largest lender, argued that sanctions have inadvertently helped Russia’s main oil and financial companies by forcing them to abandon riskier projects before the oil price fell.

Story Continues →

via NorthEast Calling http://ift.tt/1C6jHFF