Russia moves to net exporter position in 2018
Exports of pork and offal from Russia in the year to November totalled 106,000 tonnes, an 11% increase compared to the same period in 2017. This puts the nation into the position of net exporter.
This rise in exports was supported by an increase in exports to Vietnam, which increased over two fold in the year to November, to stand at 15,000 tonnes. Additionally exports to Belarus, Azerbaijan and the Ukraine have all increased year-on-year. However, exports to Hong Kong, Russia’s largest export destination declined by nearly 23% year-on-year, to stand at 26,000 tonnes.
When breaking it down by product, fresh and frozen shipments have increased by nearly a quarter year-on-year, reaching nearly 30,000 tonnes in the year to November. Meanwhile, exports of frozen offal increased by 44,000 tonnes, an 11% increase compared to the same period in the previous year. Frozen livers of swine have picked up in the year to November, increasing from just 400 tonnes in 2017 to 1,600 tonnes in 2018.
In the year to November, imports of pork and pig offal to Russia were down by nearly 70% year-on-year, at 96,000 tonnes. The drop off in imports was due to a temporary ban on pork products from Brazil, historically one of Russia’s largest source of pork imports. The ban was implemented in December 2017 after traces of ractopamine, a feed additive permitted in Brazil but banned in Russia, were found in some imported product. As a result, in the year to November imports of pork and offal decreased from 238,000 tonnes in 2017 to just 11,800 tonnes in 2018.
However in October 2018, it was announced that imports from Brazil would resume again, with nine Brazilian plants having been approved. This has yet to emerge in the trade stats so far, and so it will be interesting to see if levels will resume to the same levels as before the ban.
Increased exports and decreased imports both contributed to a tight supply, which supported Russian pig prices throughout much of the year, with prices peaking at 133RUB/kg (151p/kg) at the end of August. However according to some industry reports, outbreaks of African Swine Fever (ASF) are damaging Russia’s pork industry by preventing exports to some Asian markets. This in conjunction with increasing local production has put pressure on domestic prices. As such, pork prices towards the end of the year were more volatile, with the year ending with prices at 101RUB/kg (115p/kg).
Adding to the mix, exchange rates too are likely to have influenced trade dynamics. The value of the Ruble has weakened relative to both the US dollar and the Euro during 2018. As such, imports would have been more expensive, while Russian products will have become more price competitive on export markets.
Production forecasts from the Russian Union of Pork Producers (RUPP) suggest that overall Russian pork production is expected to reach 4.4 million tonnes by 2022. This growth is expected to come as production moves away from smallholdings to commercial production.
Additionally, the RUPP expects that imports are likely to increase over the next few year, as shipments from Brazil resume and if Russia decides to move away from a quota-based system to a 25% import tariff to all pork imports. Exports are also expected to increase by 200,000 to 300,000 tonnes over the next few years, as Russia extends its role on the global market.
Felicity Rusk, Trainee Analyst