January 5, 2007

 

Russia opens its doors wider for Brazilian meat

 

 

Russia has lifted the ban on frozen meat supplies from most Brazilian states and all Brazilian processed meat products, allowing Brazilian meat, allowed to enter Russia nearly full force for 2007.

 

Brazilian importers are confident that all limitations would be removed in January as most of Russia's meat-processing industry use Brazilian meat and its supplies are running dangerously low.

 

Following the outbreak of foot-and-mouth disease in several states in October 2005, more than 53 countries banned Brazilian meat. Russia banned meat products from seven Brazilian states which accounts for 60 percent of Brazil's total exports to the country. However, it has been lifting them gradually.

 

In April 2006, Russia allowed meat produced after July 1, 2006 from Rio Grande do Sul, and in August, from

Mato Grosso. In the fall, the ban was lifted on meat from Goias, and Minas Gerais.

 

Head of Russia's National Meat Association Sergei Yushin said practically the whole of Brazil is open, adding that significantly the state of Santa Catarina, from which Russia receives significant amounts of pork, is now open.

 

Remaining restrictions concern heat-treated processed meats from all Brazilian states.

 

Top Brazilian meat companies Sadia and Perdigao welcomed the removal of the ban.

 

The companies were the only suppliers of heat-treated meat products in the Russian market.

 

Sadia is going to launch together with MiraTorg, a Russian company its own production line in Kaliningrad in 2007. The joint venture would turn out 40,000 tonnes of meat products a year and would also supply McDonald's Russian operations. It will also produce a full range of ready-to-use beef and pork.

 

The meat bans in 2006 was the reason why the company decided to build their own production line in Russia. In Brazil, the company has had to transfer whole production lines from "blacklisted" to "clean" states to continue supplying their Russia.

 

Due to the shortage of domestic beef and pork, Brazilian imports fully determine meat prices in Russia.

 

Russia's decision to allow more Brazilian imports stem from sensible economics and lessons learnt.

 

Pork prices in the country are very much dependent on the world markets, which is not developing in Russia's favour. Moreover, it has felt the severe impact of Argentina's decision to reduce exports last year.

 

Next year, Brazil will supply Russia with more meat as Europe's fails to fill its meat quota for Russia. Distribution of supplies through 2006 are uneven as well, with 183,000 tonnes over the quota and a similar amount under it within the same year, a Russian official pointed out. 

 

In the first 10 months of 2006, almost a third of Russia's imported beef and pork supplies came from Brazil.

 

As for poultry, the US remains the top poultry supplier to Russia, exporting 635,000 tonnes to it compared to Brazil's 157,000 tonnes in 2006.

 

The National Meat Association estimates Russian total meat imports from Brazil at US$1.6 billion. In the first 10 months of 2006, US$250 million were spent on poultry, US$650-$680 million on beef, and US$680 million on pork.

 

Experts are confident that there would be more Brazilian meat, or at least beef, in Russian stores in 2007.