February 17, 2011

Cherkizovo anticipates increasing poultry prices

Cherkizovo, a leading meat producer in Russia, reported a 5% rise in poultry sales to 194,100 tonnes in its latest figures, and expects higher poultry prices after a reduction in import quotas.

Cherkizovo also forecast solid volume growth for poultry this year.

Prices for poultry sales in dollar terms increased by 1% from US$2.34 per kg in the year 2009 to US$2.37 per kg in the year 2010 (excluding VAT). Prices in rouble terms decreased by 3% from RUB74.33 (US$2.55) per kg in the year 2009 to RUB71.89 (US$2.46) per kg in the year 2010 (excluding VAT).

The pricing environment for poultry products at the end of 2010 was affected by a large share of imports entering Russia in the fourth quarter. This led to higher inventory stocks and put pressure on prices during the first quarter of 2011.

However, given the considerable reduction in poultry import quotas, together with expected meat price inflation resulting from rising input costs, the company expects upward trends in poultry prices from the second quarter of the year.