Local products continue to replace imports of poultry meat in Russia.

Meanwhile, exports are expected to grow to 70,000MT.

While the Eurasian Economic Union (EAEU) markets (namely Kazakhstan and Kyrgyz Republic) will likely remain the major destination for Russian broiler meat, Russian producers have received access to new markets in Middle East and further exports to new markets may increase in 2016. However, sanitary issues may impede these exports.

FAS Moscow forecasts 2016 broiler production to reach 3.70 million metric tons (MMT), or 4 per cent growth year-on-year, due to continued production expansion by leading producers and stable demand for broiler meat.

Domestic producers are predicted to continue expansion at a slower pace compared to 9 per cent in 2015.

There are indications of saturation of the Russian broiler meat market, such as wholesale and consumer price decreases, especially when compared to the inflation levels and price growth for other food items.

However, FAS said that despite the growing production and intensified competition among local producers, the risk of market over-saturation in 2016 has decreased because several expansion projects were put on hold due to the increased cost of borrowed capital, growing operational expenses and declining margins.

Growing production costs and price sensitive consumer demand continue to impact margins; sector consolidation and competition between producers may intensify.

Broiler meat consumption is expected to be 3.76 MMT, a minor 0.4 per cent growth from 2015.

A growing number of Russian consumers respond to the on-going economic crisis by economising on food purchases, and the demand for broiler meat remains stable given its competitive price when compared with other meat products.

Broiler meat prices are not expected to increase in 2016, so poultry will most likely remain the meat of choice both for struggling Russian households and for the meat processing industry.

Trends in other meat markets, primarily turkey and pork, influence the consumer demand for broiler meat.

The Ministry of Agriculture reported 34.9 per cent annual growth in turkey production in 2015, to 205,000 MT (live weight). Turkey competes with other meats for its share of declining meat consumption, and the growing popularity of turkey constrains stronger growth in demand for broiler meat in 2016.

In addition, the average price in Russia for pork half-carcasses dropped by 32.7 per cent to 2.03 USD/kg between January and December in 20152 . Further decline in pork prices may result in some shift in demand from poultry back to pork, particularly in the meat processing industry.