July 1, 2010

 

 

Africa and the Caribbean markets have helped Georgia poultry producers weather Russia's six-month ban on US chicken imports, which ended last week.

 

President Obama reached an agreement with Russian President Dmitry Medvedev that will restore access to a market that bought more than US$750 million worth of American poultry in 2009. A large share of those revenues goes to companies based in Georgia.

 

If USDA guidelines on the pact come out this week as expected, companies might be able to begin packing and shipping product to Russia as early as the end of the week, said Jim Sumner, president of the Stone Mountain-based US Poultry and Egg Export Council.

 

As justification for the ban, Russia cited American producers' use of chlorine rinses to disinfect chickens during processing. Under the new arrangement, Russia will allow access by exporters that switch to one of three approved antimicrobial washes.

 

Although they will incur added costs, most producers will gladly make the change to begin selling in Russia again, especially in a year with so many hurdles. 

 

While bouncing back from the recession domestically, producers found themselves shut out of the emerging economies that had become their two biggest export markets.

 

A month after the Russia ban went into effect, China launched an anti-dumping investigation against American chicken producers and followed it with hefty tariffs that rose in some cases to 105.4%, pending the outcome of the government's investigation.

 

But losing access to Russia and China didn't bring about the cataclysmic effects expected by some in the industry. Global prices of leg quarters, which make up virtually all US exports to Russia, remained somewhat stable in the first four months of 2010 despite the drastic drop in demand. Overall, export values fell by only 4% in compared to the same period last year.

 

That's largely because traditional markets picked up some of the slack, and new countries in Africa and the Caribbean grabbed significant slices of the market share that Russia and China forfeited, Mr. Sumner said.

 

"We have been developing additional markets, and we have been very successful at doing so. We relied significantly on other markets during the course of this period and we were quite pleasantly surprised," he said.

 

As Russia and China's combined 40% share of US exports dwindled to 3.9%, Cuba jumped from the sixth largest market to third behind Mexico and Hong Kong, which both saw sizable increases. The share of countries whose volumes were too small to be measured individually jumped from 36% to 50%. The southwestern African nation of Angola's share climbed to 4.4% and Taiwan, considered separate from China in this case, broke into the top six at 3.9%.