aA
Chief Analyst at DNB bank Indrė Genytė-Pikčienė says that meat exporters will face greater damage from the Russian food imports embargo, whereas dairy producers have accumulated considerable financial reserves to get through this difficult period.
Lithuanian dairy sector more resilient to Russian embargo than previously thought
© Reuters/Scanpix

According to the expert, the Russian embargo on food imports from the European Union packed the greatest punch against Lithuania, based both on relative indicators and their total value. However, separate farming sectors will feel the effects of restrictions at different extent.

Dairy sector will be the least affected. Their exports to Russia decreased even before the embargo - by 4.2 percent in 2013 and by remarkable 10.2 percent in the first half of 2014. The economist noted that in 2008-2012 profitability of milk processors was growing, thus companies had an opportunity to accumulate financial reserves to withstand the boycott imposed by Moscow. Dairy sector reoriented to other markets prior to the embargo. Therefore, even though exports to Russia plummeted, the total export rocketed by 15 percent. In 2013-2014 Lithuanian dairy products' export to Vietnam, Cuba, Morocco, Kazakhstan and Japan increased substantially.

Meanwhile Lithuania's meat sector faced two blows - the Russian sanctions and African swine fever. Genytė-Pikčienė said that profitability of this sector in 2008-2014 never exceeded 1 percent and was often in the red, so companies did not manage to store up financial reserves. 25 percent of raw meat was exported to Russia before the embargo, while search for new markets was sluggish, it mostly focused on increasing sales in well-known markets, such as Latvia, Germany and Great Britain.

"Seeking to reduce the effects of the Russian embargo, exporters are actively searching for new markets and relying on assistance from the state which should be met with reservations. It is not very fair for businesses to wait for help from the government in market economy conditions. Help should be short-term and directed at the most affected sectors," said Genytė-Pikčienė.

Elta EN
It is forbidden to copy the text of this publication without a written permission from ELTA.
|Populiariausi straipsniai ir video

Lithuania to renew flights to more German cities and Netherlands

On 27 May Lithuanian government has allowed renewing more flights to Germany and the Netherlands .

Pandemic emptied cinemas: will they survive?

In an attempt to evaluate the long-term effects of Covid-19 on cinema operators, the law firm...

One more flight to be resumed from Vilnius

Latvian airline airBaltic is resuming its Vilnius- Tallinn flights on Monday after the Lithuanian...

Lithuania lifts restrictions on anti-coronavirus product sales

The Lithuanian Health Minister on Thursday lifted restrictions on medical face masks , respirators,...

AirBaltic launches new route from Vilnius to Oslo

After receiving all of the necessary permissions, airBaltic announces that it plans to launch direct...

Top news

Lockdown extended until June 16

Lithuania’s government on Wednesday extended the coronavirus lockdown until June 16.

Special Investigation Service names biggest threat in country

Systemic corruption is the most dangerous and its initiators pose the biggest threat as experience...

Lithuania to renew flights to more German cities and Netherlands

On 27 May Lithuanian government has allowed renewing more flights to Germany and the Netherlands .

Lithuania appoints its new EU permanent representative

The Seimas of Lithuania has appointed Ruta Baneviciute as its new permanent representative to the...

8 new coronavirus cases

On Tuesday, 8 new coronavirus cases were detected in Lithuania. Since the outbreak of the pandemic,...

|Maža didelių žinių kaina