US poultry imports to Russia face delay

 

 

The delay in announcing the resumption in US poultry meat imports to Russia has been attributed to the efforts of local producers to raise domestic output to meet demand.

 

Despite five months of talks and a number of optimistic statements by Russian officials about an upcoming positive decision on the import of chicken quarters from the US, the Russian agricultural lobby seems to have the upper hand over their US counterparts.

 

According to reports, the Russian Industry and Trade Ministry on Thursday (June 3) approved the import of 150,000 tonnes of chicken meat from other countries, assigning them part of the US quota and promising to issue relevant supplier licenses.

 

They are most likely to be granted to Turkey and Italy, but the search for new suppliers might take longer than expected.

 

The 150,000 tonnes is only a quarter of the US share on the Russian poultry meat market. The failure of the talks could be seen as a concession to Russian poultry breeders and an attempt to determine if they will be able to fully replace imports on the domestic market.

 

Problems with US chicken imports began on January 1, 2010, when Russia enforced new sanitary standards similar to those of the EU, under which the chlorine solution used in meat processing, should contain the same amount of chlorine as tap water: 0.5mg per litre. This is why Russian producers now use European processing technology for chicken meat, mixing cold air with acetic and lactic acids.

 

American chicken meat is washed with a 20-50mg per litre chlorine solution. Russian health officials declared chlorine bath to be unsafe and banned the procedure, demanding that US farmers adopt new technology by January 1, 2010 or lose the Russian market.

 

Talks began almost immediately, and it seemed the sides would reach agreement by early spring 2010, especially since the US share of the Russian poultry market was 20%, according to reports.

 

As of early 2010, Russian producers satisfied approximately 75% of the market demand, and the country imported the remaining 25%. Of that amount, some 80% was imported from the US, the world's largest poultry producer and exporter. The US quota is 600,000 tonnes this year.

 

The Russian Agriculture Ministry said it would take at least four years before domestic produce could fully replace imported poultry meat. Some analysts have calculated that a ban on US poultry imports would raise prices 15%, which is a weighty argument in favour of the talks.

 

A number of statements were made on an imminent end to this chicken dispute. In March 2010, Russian Foreign Ministry officials said it had been agreed that US farmers would use EU poultry processing methods.

 

In late April, the Agriculture Ministry published data showing that prices for some poultry produce fell, which is not surprising because poultry production in Russia rose nearly 17% in the period January to March.

 

Russian poultry producers have been consistent opponents of imports. Representatives of many companies and associations said that cheap (i.e. American) imports were hindering the domestic sector's development.

 

While Russian and US officials were discussing the resumption of poultry meat imports, Russian farmers increased production to prevent price hikes. Prime Minister Vladimir Putin warned in late April that the US poultry meat import quotas could be cut.

 

Russian poultry producers can celebrate their victory in this battle, but the war is not over. The fact that no official statement has been made on a poultry import ban or radical cuts in import quotas shows that the Russian authorities are not confident that domestic producers can meet market demand, the report stated.