Ukraine crisis complicates trade

|
News,Business

BOISE, Idaho (AP) — When Russian President Vladimir Putin ordered troops into Ukraine, the resulting crisis disrupted the trade plans of some Idaho businesses.

Representatives from 17 Idaho businesses had joined Gov. Butch Otter on a trade mission to Russia last November.

The Idaho Statesman (http://bit.ly/1i1A0LC) reports many of their hopes of developing new business are now on hold.

Jos Zamzow is chief operations officer at Dynamite Marketing, a Nampa company that makes fertilizers, pet food and stock feed. He went on the trade mission and met with pet company representatives and attended a pet product expo.

"We were in the process and getting very close (to start exporting to Russia), but I've put brakes on it given the situation with Putin and all of the uncertainty there," Zamzow said.

Idaho exports to Russia totaled $20.5 million in 2013.

Russia appeared particularly ripe for the nine agriculture companies on the trade mission, including Heyburn's Double L, which makes potato harvesting and handling equipment.

Dan Piquet, who oversees Double L's sales to the countries of the former Soviet Union, said Russia has seven times the potato acreage of the U.S. and a demand for American equipment.

Piquet came home from the trade mission with a $145,000 equipment sale and leads that could generate $1.8 million in additional sales to Russia.

So far, U.S. sanctions have made travel more difficult for members of Putin's inner circle but haven't restricted trade. Piquet said the current sanctions won't hinder Double L's export plans.

"As long as our governments can communicate enough to have exports and imports somewhat free, (the current sanctions) won't get in the way of anything," he said. "If Putin or Obama slap an embargo on trade in this little contest they're having, then it will absolutely get in the way."

The trade mission paved the way for one of Double L's competitors, Sugar City's Logan Farm Equipment, to increase exports to Russia, which already amounted to about $500,000 a year, said Clinton Arnold, national sales director.

The Russian market has the potential to boost exports for the 105-employee company by 75 percent and total sales by 25 percent, he said.

Logan's exports have not been affected so far, but Arnold said he's delayed a trip to Russia and Ukraine to negotiate deals for at least a month because of the uncertainty.

Otter said the political tensions aren't insurmountable for business. Some Idaho companies are preparing for return trips to Russia, and representatives from Russian companies were in Idaho last week trying to hammer out trade deals, Otter said.

"We still have high hopes for benefiting from our new trade contacts," Otter said.

Another company affected is Boise's Agri Beef Co., which sells beef from around the region.

In February 2013, Russia banned imports of meat with traces of ractopamine, a growth promoter commonly used in cattle feed in the U.S. The additive has been deemed unsafe for humans in Russia and other countries, including China and European nations, but remains legal in the U.S.

Jay Theiler, Agri Beef's executive director of marketing, said the company sold $10 million in beef to Russia in 2012.

Theiler went on the trade mission to talk with Russian officials about ranching practices that would satisfy the Russian concerns and allow sales to resume. He said those negotiations now depend on better political relations.

"Because of the current tensions, it would appear that nothing will occur in the immediate future in regards to reopening the market," Theiler said.

___

Information from: Idaho Statesman, http://www.idahostatesman.com

View article comments Leave a comment