Policy of Self-Sufficiency Pushes up Meat Prices

RUSSIA - As the country aims for self-sufficiency, poultry meat and pork producers are happy that prices are rising steeply on the market, according to a new report.

22 February 2010

3 minute read

With the desire for security so integral to the Russian soul, it's no surprise that the country is currently aiming for self-sufficiency in a number of agricultural sectors, according to a new report Russia Agribusiness Report Q2 2010 from Companies and Markets.

Chief among these are poultry and pork. In April 2009, First Deputy Prime Minister, Viktor Zubkov, declared the country would be fully self-sufficient in both meats by 2011. While it is not expected that Russia will achieve this goal in either commodity quite so soon, Russia Agribusiness Report for Q2 2010 forecasts sizeable gains in production of pork and a dramatic rise in poultry output.

One way in which Russia appears to be moving towards its self-sufficiency target is through trade barriers. A spat of sizeable proportions has erupted following a Russian ban on imports of US poultry. On the surface, the Russians have actually banned imports of poultry disinfected with substantial quantities of chlorine. But the regulation is a de facto ban on imports of US poultry, since using heavily chlorinated washes is standard practice for US producers. Russia has also banned pork imports from all but six US facilities for similar reasons. The Americans have reacted furiously, accusing the Russians of protectionism. At the time of writing, the dispute has not been resolved and poultry prices in Russia are heading steeply upwards – to the delight of domestic producers.

New USDA figures put 2009 poultry production at 1.79 million tonnes, down slightly from Q1 2010 figure of 1.81 million tonnes. In this report for 2010, production is forecast to reach 2.10 million tonnes, growing 11.8 per cent year-on-year. The ban on US poultry imports – which, in 2008, were worth US$800 million – will push up prices and help Russian producers expand. Between 2009 and 2014, production is forecast to rise by 94.5 per cent from 1.79 million tonnes to 3.48 million.

Latest USDA figures put Russian pork production at 2.21 million tonnes in 2009. In 2010, the report expects to see modest growth of 1.5 per cent, with production reaching 2.24 million tonnes.

Over the forecast period to 2014, the authors expect pork production to show reasonable growth of 14.54 per cent to reach 2.53 million tonnes.