EU's poultry exports to Russia fraught with uncertainty

As Russia seeks to become self-sufficient in poultry products, European poultry exporters face an uncertain future in trade with the country.

 

EU poultry processors are "moderately optimistic" about raising exports to Russia this year, after disruption in 2009 caused by a range of trade curbs.

 

Russia's overall poultry imports slumped by 38% in the first half of 2009 as measures including quota reductions and fresh sanitary measures compounded the impact of financial hiccups among merchants and a weaker rouble.

 

However, the revival in EU trade may prove short lived if Russia makes headway in a campaign to ramp up domestic meat production, a report from the USDA staff in Paris said.

 

"On the longer term, these exports are uncertain," the briefing said. "Russia is systematically decreasing meat import quotas from year to year and openly vows its goal is to reach self-supply sufficiency in 2012."

 

Moscow last year cut the quota for EU broiler imports by nearly one quarter to 185,800 tonnes.

 

While leaving some headroom above imports, which totalled 144,000 tonnes in 2008, the cut was viewed in Europe as limiting potential for growth and as a warning shot of further reductions to come.

 

Russia has historically accounted for about 20% of EU broiler exports, ahead of Saudi Arabia, Hong Kong and Benin.

 

Nonetheless, for now Europe's poultry production, centred in the UK, looks set to enjoy a further increase in profitability, helped by lower grain prices.

 

The report also flagged efforts by the European Commission to close a loophole in import rules which have allowed poultry products filled out with non-meat products to enjoy low tariffs.

 

However, Chinese imports, while still at a low level, represent a growing threat to the market and "should be watched closely". "Imports of preserved and cooked broiler meat from China, which were non-existent before, reached close to 3,800 tonnes in 2009," the briefing said.