ISTANBUL--Turkey is preparing to ramp up food exports to Russia, seeking an economic boost from Moscow's ban on Western produce amid the continuing conflict in Ukraine.
Russian President Vladimir Putin's decision last week to block certain food imports from the European Union and the U.S. is a potential boon for Turkey just as Islamist insurgents in Iraq choke off trade to key markets for Turkish goods. Exporting food to Russia could also help make up for slowly recovering demand from the EU, Turkey's biggest market.
Shipping more fruit, vegetables and dairy products would also aid Turkey in plugging an annual trade deficit of about $20 billion with Russia.
"This is 100% positive, we need to seize this opportunity, Russiacan devour everything we produce," said Ahmet Ozer, vice president of the general assembly at the Istanbul Chamber of Commerce. "We don't have energy like Russia, but we have agriculture, water and farmlands; we must work them and sell our produce."
Last year, Turkey sold $7 billion worth of goods to Russia, which Mr. Ozer said could jump by 25% as Moscow turns to Ankara, among others, for food it previously imported from Australia, Canada, Norway, the U.S. and the EU.
But rushing to Moscow's aid as it trades barbs with the West over Ukraine could put Turkey, a North Atlantic Treaty Organization member, at odds with its allies.
The EU, which Ankara seeks to join, is already concerned that increased exports from countries like Brazil and Egypt could undermine the effectiveness of sanctions imposed on Russia by Brussels and Washington.
"If Turkey acts as if it's not a part of the West and NATO, choosing the path of profiteering instead, it will clearly cause political tensions," said Sinan Ulgen, a former Turkish diplomat who is now a visiting scholar at the Carnegie Endowment for International Peace in Brussels.
Meanwhile, increased Turkish food exports to Russia could stoke domestic prices. That doesn't bode well for Turkey, where food has been a key driver of inflation as it jumped to an annualized 9.3% in July--the highest level since April 2012.
"Turkey should take steps to soften the impact of exports to Russia on the domestic market," said Ibrahim Yetkin, chairman of the Agriculturalists' Association of Turkey, citing inflationary pressures. "We should also bear in mind that this is a political decision that can be reversed at any time."
Write to Yeliz Candemir at email@example.com and Emre Peker at firstname.lastname@example.org
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 15, 2014 12:05 ET (16:05 GMT)
Copyright (c) 2014 Dow Jones & Company, Inc.