*- Without data on trade between Russia andByelorussia.

Source: Customs statistics of RF externaltrade.

Up to September 1998, the growth of theimport purchases was accompanied by the reduction of the average importcontract prices. After the financial crisis, the import flows of the agrarianproduce and food strongly reduced (see Tableа2.19).

Table 2.19.

Dynamic of import of most important agrarianproduce and food in first to third quarters of 1998 (without unorganizedtrade)*

*-. Without data on trade between Russiaand Byelorussia.

Source: Customs statistics of RF externaltrade.

At the same time, the suppliers of theimported food to the Russian market raised their average contract prices in theUS$аDollars, notwithstanding that, even without such increase, only as a resultof the devaluation of the national currency, the Ruble prices on the importedgoods were high enough for the Russian consumers (see Tableа2.17).

This strategy of the companies wasexplained by their wish to compensate to some extent by increasing the contractprices the losses from the import August-September blockade of import. In theother words, for many suppliers of the foreign produce, the main goal of tradein the Russian market was to earn the short-time profit and not to save acertain niche in this market. However it should be noted that, in the longterm, the large trading companies would, most probably, begin selling theproduce at the dumping prices in order to save the sales volume. Thus, alreadyat the end of 1998а‑beginning of 1999, the drop of the prices on the chicken legs from the USA wasobserved. The USA holds 70% of the aggregate volume of the import of thisproduct to the Russian market.

Fig. 2.17

Alteration of average import contract priceson certain agrarian produce and food in Septemberа1998
compared with Augustа1998

Source: Social-economic Situation ofRussia. January-Octoberа1998. Moscow, Goskomstat. 1998. P.а144

In the first half of 1998, the aggregatecost of the food export was reducing, though the physical export grew. This wasdue, first of all, to the decrease of the world market prices. In the thirdquarter-year compared with the second quarter-year, the export of the agrarianproduce and food grew by 13%. Moreover, this resulted from the growth of theexport to outside the FSU (by 28%) at the reduction of the export to the CIS(by 16%). This phenomenon may be explained by the growth of the exportprofitability due to the increase of the currency exchange margin. However, inthe third quarter of 1998, the food export of Russia did not, yet, reach thevolumes of 1997. No significant growth of the export occurred on the basis ofthe Ruble devaluation because the range of the Russian agrarian produce andfood traditionally exported to other countries is very narrow and the domesticproduction is limited (see Tableа2.20).

Table 2.20.

Dynamic of export of most important agrarianproduce and food in first to third quarters of 1998
(without unorganized trade)

*-. Without data on trade between Russiaand Byelorussia.

Source: Customs statistics of RF externaltrade.