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Estonian firms feel effects of Russia sanctions

Aug 22, 2014
From wire reports, TALLINN

Estonian firms feel effects of Russia sanctions

Russia's sanctions on Western products have affected a fifth of Estonian companies, a poll reveals.

A poll conducted by the Estonian Chamber of Commerce shows how Russia's sanctions have had a direct negative impact on a fifth of the 153 polled companies, Postimees writes.

However, despite the revelations, some firms say they have benefited from the sanctions after seeing a rise in trade with Russia.

Besides the agriculture and food sector, the direct impact of sanctions has already been felt in the logistics and transport sector. Auto transport in the Russian direction has also considerably decreased.

However, more than half of the entrepreneurs who participated in the study said Russia's sanctions have not had a direct impact on them.  There are some firms in Estonia who have benefited or expect to in the future from the current foreign political situation.

Clients of some Estonian companies have received additional orders from Russia since Russian companies cannot get the necessary industrial production from eastern Ukraine. Businesses operating in border areas hope that the import ban on food products will bring more Russians to Estonian shops.

The respondents are more concerned about the indirect effects of the sanctions. Nearly 60% of the respondents felt that they have already felt the indirect impact of the sanctions or think that the negative effects manifest themselves in the near future.

Companies think that their customers will reduce exports to Russia and orders from Estonian companies would also decrease. The main reason for the fall in exports is not considered to be the sanctions, but the tense political situation and the weakening of the ruble.

The survey results showed that in addition to food (especially fish and dairy products), some enterprises experienced reduction of building materials and manufactured goods orders.

Respondents estimate that the tense situation can reduce Russian transit through Estonia and they consider a negative influence on the tourism sector likely.

The Chamber of Commerce said that businesses who have already been directly or indirectly affected by the Russian sanctions, are looking for new markets for export (30% of respondents). In addition, they plan to make changes to products portfolio (22%) and to reduce the volume of production (19%).

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