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Bethan Wilkins


AHDB Pork Market Intelligence


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Will latest WTO ruling enable EU trade with Russia to resume?

Home \ Prices & Stats \ News \ 2017 \ March \ Will latest WTO ruling enable EU trade with Russia to resume?

Russian pork imports declined again during 2016, with shipments for the year dropping below 300,000 tonnes for the first time since 2000. One reason for this is that trade with the EU has been affected by the implementation of bans in 2014. But are some parts of this trade about to resume?

The Russian ban on imports of pig meat products from the EU has been in place since early February 2014. The substantial live pig trade also ceased. It was officially stated for health reasons, due to an outbreak of African Swine Fever (ASF) in areas of the EU close to the border with Belarus. This resulted in a total EU ban. However, last August the World Trade Organisation (WTO) declared this ban illegal, due to a lack of real health and sanitary risks. This went to appeal but was turned down with the WTO announcement on 23 February. As such, Russia theoretically has no choice but to withdraw this ban and allow trade to resume within 28 days.


Despite this, even if this sanitary ban were to be withdrawn, the EU would still be unable to export to Russia. This is due to a second politically-motivated ban on agri-food products imported from the EU, originally implemented in August 2014. Product from Canada and the United States was banned at the same time. However, live pigs for breeding, offal and pig fat are outside the scope of this ban, and so EU trade of these products in principle could resume. In 2013, Russia imported almost 100,000 tonnes of pig offal, and over 261,000 tonnes of pig fat, the vast majority of which was from the EU. In contrast, last year offal shipments did not reach 9,000 tonnes, and pig fat volumes remained under 18,000 tonnes. South America was the primary supplier.

The value of the EU pig fat export market in particular has been severely impacted by the removal of access to Russia. In 2016, shipments were worth less than half of what they were in 2013. However, exports of offal have not seen the same decline, with growth in shipments to China more than compensating for the loss of Russia. Nonetheless, if this market becomes more difficult as the year progresses, the reopening of Russia could provide a welcome additional outlet for EU pig offal, in addition to supporting the fat market.

There has also been some talk about the lifting of the wider agri-food import ban, if the US government is able to repair relations with Russia under the Trump presidency. Clearly this is highly speculative, though again could provide some support to the global pork market at a time when it could be more difficult this year. In 2013, the year prior to the bans, Russia imported 620,000 tonnes of chilled and frozen pork, with over half coming from the EU. Last year, as for offal and fat, almost all of the 259,000 tonnes imported was shipped from Brazil.

However, even if or when access to Russia resumes, the EU should not anticipate a return to the volumes shipped prior to the ban. Russian domestic production is expanding considerably given ongoing investment in large scale intensive farms. Production rose by an estimated 10% to 2.9 million tonnes in 2016 and a further expansion of 4% is forecast for 2017 based on the latest USDA report. This growth has occurred even despite continued outbreaks of ASF, which has accelerated the closure of backyard farms. These have been disproportionally affected by ASF and the fall in pig prices in the last two years than large scale farms.

Ultimately, Russia is aiming to become a global pork exporter. Overcoming ASF will be crucial for this, both to enable production to continue expanding and also to increase export opportunities, preventing any oversupply on the domestic market. ASF currently limits Russia’s access to a number of key export markets, including China, but shipments still more than quadrupled on the previous year during 2016 and exceeded 18,700 tonnes. Russia may ultimately become a rival exporter of pork products, rather than the key import market it once was.


Bethan Wilkins, Analyst, 024 7647 8757