Russia’s WTO accession might affect food prices in Estonia

TALLINN- Accession of Russia to the World Trade Organization (WTO) and consequent lowering of duty barriers will make Russia’s large food market even more appealing to European producers and it is also expected to affect the prices of products in Estonia, Eesti Paevaleht writes.

“Theory says that when big changes take place at the market, price is the only thing that reacts,” said retail chain Prisma manager Janne Lihavainen. “The benefits from Russia’s joining will come over a long period of time, but that is most likely preceded by short and abrupt price shocks.”

Price disturbances are caused by the fact that the majority of producers will attempt to increase exports to Russia at the same time and that reduces supply at the home market.
Meanwhile, Russian producers will have a more favorable opportunity than before to come to Estonia with their goods that will bring new products to shops and will start pulling down the average price of a food basket.