Farm Gate to Fork
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Is Russia Nearing Self-sufficiency in Meat?
How far has Russia come down the road to self-sufficiency in the meat sector?
The government has declared the aim of not relying on meat imports to sustain the market and the latest figures show that the country is moving more and more rapidly to relying on domestic supplies.
According to Agroinvestor and the market analysts IMIT, Russia is on the way to seeing the share of imported meat on the Russian market down to between six and eight per cent of the total.
By the end of this year, analysts predict that import supply will fall by between 20 and 30 per cent with the largest fall in the poultry meat sector.
IMIT data shows that Russia imported 860,000 tonnes of meat and meat products last year worth $2.5 billion. This is a fall of nearly 300,000 tonnes from 1.15 million tonnes in 2014.
Beef and beef by-products accounted for the greatest share of the imports at 48 per cent, followed by pork with 36.8 per cent and then poultry at 15.2 per cent.
Forecasts from the Agriculture Institute ICAR the fall in imports is expected to peak in the next few years.
Between 2015 and this year the fall is expected to be around 35 per cent, with beef and beef by-products being reduced by 32-35 per cent to 400,000 to 415,000 tonnes. Pork, pork by-products and bacon imports with decline by 35 per cent to between 240,000 and 250,000 tonnes and poultry meat imports will drop by 34 to 40 per cent to between 150,000 to 170,000 tonnes.
Leading meat analyst at ICAR, Daniel Khoto said: “Total imports of meat will fall to 820,000 to 850,000 tonnes.”
The drop in the imports of meat has been put down, not only to the desire to turn to more domestic production, but also the ban on imports of some meat products from the EU and the volatility in the market and the fall in the value of the rouble.
Sergey Yushin, the head of the Russian National Meat Association said it was becoming clear towards the end of last year the degree by which meat imports would be falling in 2016.
“Given the situation with consumption and the rate of growth of domestic production, we expect a reduction in supply of between 10 and 15 per cent,” he said.
He added that a strengthening of the rouble could change the situation and the situation could also change after the Olympic games in Rio, when analysts believe he Brazilian real is likely to drop in value, with the possibility of a devaluation, leading to a fall in the price of Brazilian beef, making it more attractive to Russian importers.
At the same time, this low priced Brazilian beef is also likely to become more attractive to importers in China and the USA.
A slightly different scenario has been put forward by Tatyana Chernenko at IMIT, painting the picture that beef and pork imports might actually rise slightly in Russia this year, while the fall in meat imports will be felt in the poultry sector.
The Russian Poultry Union said that poultry meat production last year reached4.48 million tonnes, which was 319,000 tonnes more than in 2014 and this year production could rise to 4.65 million tonnes.
Already in the first quarter of the year the sector had seen growth of 67,000 tonnes.
The Director General of the Union, Galina Bobylev said: “We expect a reduction in imports for the year and in the first three months’ imports have already fallen by 14 per cent.”
The chief analyst at the National Swine Union Nikolai Birulin said that because the total pig meat and pig meat by-products supply last year was 21 per cent or 338,000 tonnes down on the 2014 figure, this year imports, particularly from Brazil are expected to rise slightly by between 50,000 and 100,000 tonnes.
One of the leading Russian integrators Chekizovo said that this was because of the favourable prices for Russian importers from Brazil.
However, ICAR said that over the next two or three years, the meat industry can expect general reductions in imports although rather less aggressively than those this year.
“The rate of the decline in imports is correlated with the growth of the domestic livestock industry,” Daniel Khoto said.
The market share of imported pig meat is set to fall to between five and seven per cent – a level that has already been achieved in the poultry meat sector.
The share of the beef market relying on imports will be higher at about 17 to 20 per cent.
However, the Russian government is making a big push to increase domestic beef production and in April an order was signed to distribute grants worth 3 billion roubles to 16 provinces to support regional programmes to develop beef cattle breeding.
The subsidies are part of the agricultural development programme for 2013 to 2020.
Tatyana Chernenko said that a comfortable figure for the share of imported meat to take of the Russian market would be between six and eight per cent.
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