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Tree nut market likely to feel pinch from Putin's retaliation

WASHINGTON - California-grown tree nuts may be hard hit by Russian President Vladimir Putin's ban on food imports that went into place this week in retaliation to sanctions imposed over the Ukraine conflict.

Putin signed the Aug. 6 order that targets not only U.S. exports of fruits and vegetables but also a wide variety of foods originating from European Union countries as well as Canada, Australia and Norway. The one-year ban covers beef, pork, poultry, fruits, vegetables, fish, seafood, cheese, milk and other commodities.

U.S. exporters shipped $1.3 billion worth of food and agricultural products to Russia in fiscal year 2013, and the leading categories include poultry/meat ($310 million); tree nuts ($172 million) and soybeans (147 million), according to the U.S. Department of Agriculture.

Russia ranks as the 11th largest export market ($138.6 million) for U.S. almonds and the sixth export market for pistachios ($30.9 million).

"That's a pretty good chunk for our industry," said Ken Gilliland, international trade director for Western Growers Association, based in Irvine, CA. "If suddenly that market disappears, it takes time to find other markets."

Long-term contracts will have to be entangled, and the latest trade sanctions will have to be absorbed as California growers struggle with water issues.

Another market likely to feel some discomfort from the trade war is fresh fruits. Russia imported $35.6 million worth of U.S. tree fruits last year.

Russia ranks as the third-largest export market for pears ($12.1 million), and the 28th largest market for table grapes ($2.7 million).

But U.S. suppliers won't be the only ones feeling the pain. The latest trade squabble may end up hurting Russian consumers more than U.S. businesses.

"It is unfortunate that the biggest losers in this will be Russian consumers, who will pay more for their food now as well as in the long run," said Bob Stallman, president of the American Farm Bureau Federation.