Russian pork imports now negligible
During the first four months of 2018, Russian pork imports dwindled to a quarter of the volume imported in the same period last year, at just 20,000 tonnes.
This further decline can be attributed to a ban on Brazilian pig meat imports announced in December 2017, which has depleted trade with one of the last remaining importers. Imports are now almost 10% of the level from the first four months of 2013, before any bans had been imposed.
Volumes of pig meat shipped from Brazil faded out across the first four months of the year. Compared to the 21,000 tonnes shipped last December, just 7,000 tonnes arrived in January and by April the volume was down to just 25 tonnes. Despite this, Brazil actually remained the largest supplier across the period. Chile was the only other country to ship over 1,000 tonnes in total; at 6,100 tonnes volumes were more than twice the 2017 level.
With pork imports now at these negligible levels, Russian pig prices have picked up, improving the profitability of the sector. Live pig prices rose sharply at the end of March, to over 100RUB/kg, likely reflecting the declining import levels. Prices have remained around this level since, standing at 109RUB/kg for week ended 20 June.
The latest USDA forecasts anticipate Russian pig meat production will increase further this year, to over 3 million tonnes. This would leave Russia over 94% self-sufficient in pig production. As such, exports are becoming an increasingly important area for the industry. In the first four months of 2018, Russia exported almost 11,800 tonnes of pork, around a third more than in the same period last year. In fact, during the month of April, Russia became a net exporter of pork (+46 tonnes) for the first time.
Exports currently remain focused on nearby countries like Ukraine, where shipments reached 6,800 tonnes (+50% year-on-year). The second primary market was Belarus, which received 3,000 tonnes during the same period (+80% year-on-year). However, reports suggest Russia intents to increasingly target Asian markets in the future.
Nonetheless, further expansion for the Russian pig industry will not be without challenges. African Swine Fever continues to spread in many regions, with outbreaks in the key Eastern pig producing regions at the end of 2017. The presence of ASF could be an increasing challenge for the industry in the coming years, if the market aims to become less internally focused. It will likely limit the number of countries willing to accept exports, challenging growth this area of the market.
Bethan Wilkins, Analyst
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