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Russia makes breakthrough in meat exports, 28.06.17

In previous years, exports from Russia had been growing at a moderate pace, but the country managed to “make a breakthrough” by expanding the list of importers from 25 in 2015 to 40 in 2016, said IKAR.

Ukraine the main buyer of Russian meat

Last year Russia exported nearly 115,000t of poultry, supplying 41,000t to the countries of the Eurasian Economic Union, including Belarus, Kazakhstan, Armenia and Kyrgyzstan, which have common Customs space, according to IKAR. At the same time, nearly 37,000t was delivered to the “eastern regions of Ukraine”.

According to Sergey Yushin, head of Russia’s National Meat Association, Ukraine is currently the largest purchaser of the country’s meat and, in 2016, the volume of deliveries rose more than twofold to 48,000t. However, all shipments are going to the rebel republics, controlled by pro-Russian separatists since mid-2014.

According to Yushin, these regions have a problem importing meat from those territories in Ukraine controlled by government troops, while there are virtually no borders between Russia and the rebel republics. In the regions bordering Russia, the meat industry has been developing well in recent years, he added.

The situation is something of a paradox because, according to Russia’s Federal Customs Service, Ukraine is importing large quantities of meat from Russia, while according to Ukraine’s Statistical Agencies, the actual volume of supplies is minimal. This is due to the fact that the rebel republics are not declaring meat imported from Russia to Ukraine’s government agencies.

New markets may contribute to further growth

Meanwhile, last year, Vietnam and Hong Kong jointly imported 24,000t of poultry from Russia, but, according to IKAR, roughly 95% of all those deliveries were by-products, primarily chicken feet.

As a result, despite huge growth in the overall volumes in 2016, the prospects for further growth in poultry exports remain limited, as 60% of supplies are being delivered to markets where high-margin products are not in great demand and where a significant growth in shipments is also not forecast, said IKAR.

According to forecasts from Russia’s Union of Pork Producers in 2017, the country could increase meat export volumes by nearly 20-30% even without entering new markets. However, this would require a stable situation on disease in the country and no geopolitical shocks.

In addition to poultry, Russia now exports large quantities of pork, said IKAR, indicating that, last year, total pigmeat exports from Russia rose by 170% compared to 2015, with exports of pork growing from 4,000t in 2015 to 18,000t in 2016, while the rise in exports of pig by-products was not so huge.

According to Albert Davleyev, president of consulting agency Agrifood Strategies, Russia has started export to numerous countries, including Egypt, Mongolia and UAE, but those deliveries were just trials or pilot shipments to evaluate profitability. Some supplies were directed to Africa, but high logistic spends took their toll, while exports to the Caribbean basin were surprisingly successful. He added that he could foresee some prospects for Russia’s meat in the Middle East.

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