Spain and Germany have suffered the most.
Russian sanctions imposed last week by the European Union and the United States are backfiring on the European countries, and are likely to boost wheat prices.
A report released on Tuesday by German ZEW research institute shows that the German economic optimism has decreased to it's lowest level since 2012. Another report released by the Organization for Economic Cooperation and Development (OECD) shows that Germany's growth is loosing momentum.
Several German companies lobbied against the sanctions.
It is especially important in the current situation to stop a spiral of sanctions and retaliatory measures ...we are at a risk of getting investor uncertainty in the long term” said Eckhard Cordes, head of Germany’s Committee on Eastern European Economic Relations, which is made up of more than 6,000 German companies operating in Russia.
But the whole of Europe could be suffering the sanctions' consequences soon. Professor Tim Benton, who leads the UK’s Global Food Security program and lectures at the University of Leeds, has warned on an article that wheat prices are likely to rise on 2015 due to sanctions imposed on Russian banks.
“Russian farmers will find it harder to access finance to produce their main crop” he said.
Spain has also been affected by the sanctions. The government estimates Spain’s overall export of agricultural products to Russia at 500 million euros.
“Although the bulk of Spanish farming export is EU-bound, the supplies of foods, mostly vegetables and fruit, to Russia are rather significant for our economy,” said President Mariano Rajoy on Saturday.
Even the United States, which has been lobbying for the sanctions, will suffer a significant loss. The US Department of Agriculture has assessed the losses from Moscow's food import prohibition at $715 million per year, basing the estimate on 2013 imports.