Russian pork imports grow
Russian fresh/frozen pork imports grew significantly in Q1 2016 versus the same period a year earlier, up 59% to 50.2 thousand tonnes.
Although volumes were still way down on levels prior to the 2014 trading ban, it illustrates that Russia is still utilising foreign product to satiate demand, as the drop in the global price makes it an economically sound proposition. This growth in imports has largely been driven by increasing shipments from Brazil, which were up 86% on Q1 2015. This growth was helped by the embargo against Ukrainian pork in place since January. With the devaluation of the real, Brazilian pork has become increasingly price competitive, especially at a time when the rouble is showing a lot of market instability. The average unit price of Brazilian pork was over ₽50 (24%) cheaper than the same period a year earlier.
Russian export levels have started to ramp up; although volumes are still relatively low, they were almost 7 times greater in Q1 2016 than Q1 2015. There has been significant investment in the pig production industry in Russia, with the government heavily subsidising pig production investment projects. This investment aims to grow Russia’s commercial production, with the goal to be self-sufficient by 2020. This could lead to Russia becoming a more significant exporter in the future. However, at the same time, Russian consumption of pork has fallen and, if the current growth rate continues, runs the risk of over-supply. With this in mind, there may be pressure put on the Russian pork price and both this and increasing production may cause the rise in imports to be temporary.
Vikki Campbell, Senior Analyst
vikki.Campbell@ahdb.org.uk, 024 7647 8741