July 30, 2008

US, Russia lobbies agree poultry import quota cut

USAPEEC and the Russian Poultry Meat Market Operators Association signed an agreement to propose to their respective countries a cut in the 2009 US tariff quota from 931,500 tonnes to 750,000 tonnes.

The two lobbies also agreed to propose lower quotas for the next three years, preliminarily set at 630,000 tonnes for 2010, 550,000 tonnes for 2011 and 500,000 tonnes for 2012.

Under the agreement, the US share should be no lower than 75 percent of the total import quota.

Jim Sumner, president of the US Poultry and Eggs Export Council (USAPEEC) said they do not know the exact quota for next year, as there is an agreement between the two governments, but the cut is understandable due to a significant increase in Russian domestic production.

Russia consumers about 3 million tonnes of poultry meat per year, of which 1.3 million tonnes are imported. In the first half of 2008, Russia's domestic poultry meat production increased to 1.02 million tonnes from 864,800 tonnes on-year, while imports during the same period rose to 566,900 tonnes from 534,800 tonnes.

Sumner said these factors had led to over-saturation of the poultry meat market, which in the process hurts domestic producers.

Russia, under an agreement that runs from 2005-2009, limits meat imports through tariff quotas that increase every year. Imports within the quota are given a discount tariff of 25 percent of the customs value, but no lower than EUR 0.2 per kg, while imports exceeding quota are liable to a high tariff charge of 60 percent, but noless than EUR 0.48 per kg.

To protect domestic producers, Russia plans to increase the tariff on poultry imports to 90 percent.

Russia is expected to produce 2.17 million tonnes of poultry meat this year, up 16.3 percent on-year.

The US is the biggest poultry meat supplier to Russia, shipping 872,070 tonnes last year.