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Today's paper. Last Updated: 02/10/2012

Pork, Beef Purchases Seen Falling By 20%

Reuters
Russia will consume 20 percent less pork and beef this year and cut imports substantially as the global economic crisis drives consumers to buy cheaper poultry meat, the head of the National Meat Association said.

Meat processors are also adding more offal to their sausages as consumers cut spending on food products to weather Russia's first recession in a decade, Sergei Yushin said in an interview.

"We expect the decline to support poultry producers, as normally demand shifts to poultry meat from red meat," Yushin said. "However, if poultry prices rise, some may switch to nonmeat products."

Russia produced about 6 million tons of meat in 2008 and consumed almost 9 million tons, or 3.1 percent of the world's entire meat consumption, data from the association shows.

Yushin, whose powerful industry lobby unites major meat importers, processors and animal breeders, said the country should retain current import quotas on poultry and pork.

But beef import quotas could be raised by 20 percent to 25 percent from 2010 as Russian cattle numbers continue to decline, he said.

"We are unable to compete with many meat producers, and, therefore, we will have to keep import quotas for at least the next three years," Yushin said.

Cattle breeding in Russia, however, had no prospects for growth in the next 10 years because of the huge investment required and the lack of available cheap loans.

"Cattle numbers are falling and will keep falling," he said.

The National Meat Association favors the abolition of country-specific quotas, Yushin said, but he added that such a move would encounter strong resistance from influential U.S. meat lobbies and some Russian importers.

"Quotas only imply the right of importers to ship in a certain amount, but it is by no means an obligation," he said.

Russian beef imports in the first two months of 2009 fell by more than 40 percent year on year to 39,000 tons, data from the association showed.

Pork imports fell by 31 percent to 53,000 tons and poultry imports by 18 percent to 92,000 tons in the same comparison.

But imports of beef offal rose by 20 percent in January to February 2009. Pork offal imports were up 23 percent.

"This means that processors are adding more cheap offal to sausage, as nobody is going to buy expensive sausage," Yushin said.

Last year, Russia produced 2.2 million tons of poultry meat and imported 1.2 million tons. Pork output was 2 million tons and imports 770,000 tons, while beef output was 1.65 million tons and imports about 800,000 tons.

The import figures do not include offal and live animals.

Russia regulates imports by tariff quotas. The poultry quota for this year has been reduced by 300,000 tons and a tariff on pork imported above the quota has been raised.


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