Russia & FSU

Currently, the Russian Federation restricts market access for meat products using separate tariff rate quotas (TRQs), for chilled beef, frozen beef, pork and a quota for poultry.

Russian meat and poultry quotas were announced on December 31, 2004. Quotas will be higher than last year:

US Quotas:
Pork - 467,400 metric tons (mt), up from 450,000 mt
Frozen beef - 430,000 mt, up from 420,000 mt
Chilled beef - 25,700 mt
Poultry - 1,090,000 mt, up from 1,050,000 mt.

Russia is the largest export market for U.S. poultry and the 5th and 7th largest markets for US pork and beef, respectively.

Russian broiler meat imports are forecast to decrease by 7 percent in 2005 in anticipation that problems with implementing the poultry tariff rate quota (TRQ) and licensing continue.

Russian broiler meat production is forecast to grow 13 percent in 2005 sustained by continued investment in the sector, high demand and high domestic prices. RUSSIAN IMPORTS FROM BRAZIL: Despite the Russian ban on Brazilian meat, Brazil boosted pork exports by 34% between January and November, 2004 to US $688 million.

In the same period last year, by comparison, Brazilian pork exports to Russia totaled $512.7 million. Export revenue basically grew as a result of rising pork prices.

Sales have risen more sharply to Ukraine, which has bought 30,816 tons in 2004, compared with only 96 tons in 2003. Russia imported 263,500 tons of Brazilian pork in 2004.

Russia banned the purchases of Brazilian broiler meat, pork and beef owing to a case of foot-and-mouth disease found in the state of Amazonas past October. The embargo has a merely political connotation and is with other commercial and strategic goals.

It is forecast that the US will regain its pre-BSE market share by 2006. US marbled beef has a special position in the market and importers are eager to resume imports. Also with beef variety meats where 75 percent of all beef livers imported to Russia is of US origin.

Average retail prices for meat and poultry in Russia increased by more than 23 percent in 2008 while the increase in overall food prices jumped nearly 18 percent. Meat market analysts expect this trend to continue in 2010 as the Russian government continues to take protectionist measures to limit imports of meat and poultry.

According to the Russian State Statistic Service (Rosstat) average retail prices for meat and poultry increased in Russia by more than 23 percent in 2008 while the overall growth of food prices in general jumped by nearly 18 percent. Demand for beef and pork is expected to decrease due to higher prices as Russian consumers begin substituting them for cheaper proteins such as chicken meat and eggs.

The Russian government continues to implement protectionist measures against imported agricultural products such as increasing import duties on butter, soybean meal and dry milk powder, using tariff rate quotas to limit meat and poultry imports, delisting U.S. and European Union meat and poultry plants ostensibly for not meeting Russian requirements and other such actions. Alongside the protectionist climate in Russia, the Russian Ruble decreased by 35% against the U.S. Dollar during the last 6 months making imported agricultural products much more expensive. All of these factors are leading to higher prices throughout the production/import/wholesale trade/retail trade chain.

Ministry of Agriculture officials have publically vowed to limit meat and poultry imports in order to protect domestic meat and poultry producers during the global financial crisis. Outgoing Minister of Agriculture Aleksey Gordeyev has accused imported meat shipments on numerous occasions of driving down pork prices and expressed the need for serious measures to limit meat imports even if it means increasing prices for Russian consumers.

Increasing beef and pork prices will likely lead many Russian consumers to substitute more expensive red meats for poultry meat and eggs. Demand for pork is lower than for poultry and some importers are switching from buying hams and other premium cuts to cheaper pork offals and trimmings which are growing more popular with consumers who watch food prices rise on a monthly basis. With rising demand for poultry in 2010 prices are expected continue up for both domestic and imported products.

Poultry Wholesale Prices Domestic frozen poultry carcasses and chicken leg quarters’ wholesale prices in Moscow increased by 24% in December 2008 compared to December 2007. (Prices for imported chicken carcasses increased by 14% while imported chicken leg quarters’ prices increased by 31% during the same time period. Such increases were the largest seen in recent years. The price differential between wholesale domestic and imported chicken leg quarters was always substantial and generally hovered around 10 Rubles/kg in the first half of 2008. The gap decreased in the second half of the year and ranged between 3-6 Rubles/kg.

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