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Russia banning US poultry imports on Putin's order

CNBC with wires
Alexey Druzhinin | AFP | Getty Images
Alexey Druzhinin | AFP | Getty Images

Russia has banned U.S. poultry imports as part of a decree signed by President Vladimir Putin , the country's veterinary service said Wednesday. Putin earlier signed an order banning or limiting imports of agricultural products from countries which have imposed sanctions on Russia.

Putin ordered his government to come up with a list of goods to be banned for imports into Russia and to last one year, the Kremlin said. The order says the limits are being imposed "with the goal of guaranteeing the security of the Russian Federation" and calls for undertaking measures to guard against quick price hikes. The decision on U.S. and EU food import bans would be "quite substantial," the veterinary service said.

The move follows the latest round of sanctions against Russia imposed by the European Union last week, which for the first time targeted entire sectors of the Russian economy.

Read More Putin urges economic retaliation for sanctions

The U.S. and the EU have accused Russia, which annexed Ukraine 's Crimean Peninsula in March, of fomenting tensions in eastern Ukraine by supplying arms and expertise to a pro-Moscow insurgency, and have imposed asset freezes and loan bans on a score of individuals and companies.

Some U.S. poultry producers, including Pilgrim's Pride (PPC) and Tyson Foods, (TSN) were still trading in positive territory after the announcement.

The threat of a Russian ban on U.S. poultry imports had agriculture companies alert to the risks of a conflict that's already roiled trading of crops ranging from soy, beef and fruit to California pistachios.

Moscow had previously struck back against sanctions by imposing food restrictions, and would add U.S. chickens to Ukrainian soy and other products Russia has blocked since it seized Crimea: Australian beef, Latvian and Lithuanian pork, Moldovan fruit and Ukrainian juice.

Read More New sanctions for Russia-here's where they'll hurt

Sanderson Farms (SAFM), the third-largest poultry producer in the U.S., was among American agricultural companies preparing to respond if Russia carried out plans to restrict imports of U.S. poultry.

Russia was "using foreign trade as a political football" by threatening to limit poultry imports, Sanderson's Chief Financial Officer Mike Cockrell said. The Mississippi-based company was lining up other buyers for its chicken in case Moscow imposed a ban.

"We'd be crazy not to be making calls to alternative markets right now," he said.

Read More Moscow may force European airlines to fly around Russia

Russia's move to limit agricultural trade is seen as a sign the conflict with Washington is heating up. Russia imported about $1.3 billion in U.S. food and agricultural products last year, or about 11 percent of all U.S. exports to the country, according to U.S. Census data.

-By Reuters and The Associated Press. CNBC.com contributed to this report.