BUENOS AIRES (Reuters) - Major world food supplier Argentina will send a trade delegation to Russia next week to try to increase exports to the country, which this month banned many Western products in response to sanctions over its intervention in Ukraine.
Argentina’s enthusiasm for trade with Russia will improve Moscow’s chances of filling any gaps left by its ban on European Union supplies and reduce the odds of food shortages.
Argentina’s neighbor Brazil has already jumped in with both feet. About 90 new meat plants there were hastily approved to export to Russia, and Brazil began work to increase its corn and soybeans sales to Russian buyers.
Argentine state news service Telam said meetings would take place on Tuesday and Wednesday in Moscow, “with the explicit objective of quickly signing export contracts.”
Dairy product exports alone could rise 20 percent if Russia turns to Latin America’s No. 3 economy after blocking U.S. and EU milk, Miguel Paulon, head of Argentina’s dairy industry chamber, told Telam.
Moscow has blocked food imports from the United States, the EU, Australia, Canada and Norway in retaliation for sanctions over the Ukraine crisis.
The Argentine mission will include trade and agriculture ministers. “This is a concrete opportunity that we have to take advantage of,” Daniel Funes de Rioja, head of Argentina’s Copal food industry chamber, told Telam.
Increasing export revenues could help Argentina stabilize its central bank reserves, which have fallen more than 5 percent over the last year to $28.968 billion.
The trade mission comes at a time of strain between Washington and Buenos Aires. Argentina blames the U.S. federal courts for pushing it into a sovereign bond default last month, part of a long battle with a group of New York hedge funds.
On Thursday President Cristina Fernandez said she would use an anti-terrorism law for the first time against Chicago-based R.R. Donnelley, which her government accused of closing its Argentine printing plant without adequate warning. A company spokeswoman was not available on Friday.
Fernandez said the company had ties to U.S.-based hedge funds that are suing Argentina over its defaulted debt.
The subjects of the trade talks in Moscow will include beef and “some soymeal,” said a Buenos Aires trading company executive who requested anonymity. Argentina is the world’s No. 1 exporter of soymeal livestock feed.
The country, which has one of the world’s highest inflation rates, limits exports of meat, corn, wheat and other foods to try to keep domestic food prices down.
“To Russia we could export beef, grains and fruit, but our government makes international shipments difficult by not always granting export permits,” said Ernesto Ambrosetti, chief analyst at the Argentine Rural Society, which represents some of the country’s biggest farms.
“So it’s hard to really know what we could export to Russia to take advantage of a short-term opportunity,” he added.
Additional reporting by Nicolas Misculin in Buenos Aires and Arshad Mohammed in Washington; Editing by Lisa Von Ahn