«I think these changes [in the prices – K.H.] will be very big as the markets are in the habit of even reacting in advance. Maybe the markets will even overreact. Even now, on the hourly scale one may follow the dropping of milk product prices in Europe,» said Mr Murakas.
One thing is sure: the ban will turn the EU agricultural sector upside down. Important here to understand that the impact on Estonian economy and enterprises will not be limited to our local producers sitting on their goods, but the oversupply created in Europe will create an extremely intense competition on the EU internal market where the goods left over will be squeezed into.
Especially worried are the Baltic Sea fish processors for whom Russia is basically an irreplaceable exports country – the Baltic herring and sprat, abundant in our waters, are mainly eaten in Russia, Ukraine and Belarus only.
According to Estonian Fishermen’s Association chairman Mart Undrest, the volume of fish moving from Baltic Sea region into Russia is too vast to be redirected.
«Were it only Estonia that is shut up, but it’ll be basically the entire Baltic Sea region. That means, several hundred tonnes of fish will be left over, somewhere. The alternative markets like Ukraine are nothing positive either. Add those who can the fish, but their market is also mostly in the east. The situation has been tense anyhow, for this past year. This step will not push it to some kind of a new extreme,» said Mr Undrest.
Milk producers are a bit more optimistic. Valio Eesti CEO Maido Solovjov said the step created market volatility, but people all over the world still need to eat. «Here we should behold the big picture. All told, the whole globe is one vessel and it needs to be fed, one way or another. The issue is, who sells where. Rather, new markets will now be searched for,» underlined Mr Solovjov.
While the impact of the sanctions on Estonian economy are assessed to modest, Prime Minister Taavi Rõivas noted definite companies may still be considerably affected. «I really hope, personally, that these companies have alternative plans. I hope they have heard he warnings by politicians and economists alike, that Russia-directed trade may backfire due to the events in Ukraine,» explained Mr Rõivas.
Economy and infrastructure minister Urve Palo stressed that the impact of the ban will be much more long-term and indirect than seen at first glance. «Russia and the Russian market will weaken, the rouble will weaken, and their purchasing power will drop. Currently, 16 percent of tourists to Estonia are from Russia. If their purchasing power diminishes, they can’t afford to travel, and that will naturally negatively affect our economy,» said Ms Palo.