March 31, 2009

Russia will consume 20-percent less pork and beef this year and reduce imports as the global economic woes drive consumers to buy the cheaper poultry meat, according to the National Meat Association.

Meat processors are adding more offal to their sausages as consumers cut spending on food products to weather the recession, said the head of the Association, Sergei Yushin.

Yushin said they expect the decline to support poultry producers, as demand will usually shift from red meats to poultry. However, he noted that some consumers may switch to non-meat products if poultry prices increase.

Russia produced about 6 million tonnes of meat in 2008 and consumed nearly 9 million tonnes, or 3.1 percent of the world's meat consumption, said the association.

Yushin said Russia should retain current import quotas on poultry and pork but could increase beef import quotas by 20-25 percent from 2010 as Russian cattle numbers continue to drop.

He sees no prospects for growth for Russia's cattle breeding in the next 10 years due to the huge investment needed and the lack of available cheap loans.

Yushin said Russia is unable to compete with many meat producers therefore it has to keep import quotas for at least the next three years.

The situation favours poultry meat producers, and production has increased by 60,000 tonnes on-year in the first two months of 2009, Yushin said, adding that it is a large figure considering the target output of 300,000 tonnes this year.

Despite falling pork consumption this year, Yushin sees good prospects for the pig breeding sector in Russia, as feed is now cheaper and modern breeding complexes have been built while producers have become more market-oriented.

This year, Russia may produce an additional 100,000-200,000 tonnes of pork, as a result of investments made in 2007-08.

Yushin said new investments would be difficult, and owners of unfinished complexes might have problems with new loans.