August 22, 2011

 

Russia cuts 2012 meat tariff-rate quotas

 

 

Late last month, Russia slashed again its tariff-rate quotas (TRQs) on meat products for 2012 even though the country had already substantially reduced them in 2011 from past levels.

 

At the same time, Russia is hinting that it may agree to much larger TRQs in the context of its World Trade Organization accession deal, which is still being negotiated.

 

According to a July 29 Russian government announcement, Russia will set its 2012 TRQ for poultry at 330,000 tonnes, a decrease of 20,000 from this year. The 2012 poultry TRQ will be divided between 80,000 tonnes for boneless cuts and 250,000 tonnes for bone-in parts.

 

Moreover, Russia has not established any country-specific allocations within the overall 2012 TRQ for poultry. This new TRQ represents a drastic decrease from former Russian quotas.

 

For instance, Russia's overall poultry quota in 2010 was 780,000 tonnes, of which 600,000 was specifically reserved for US exports. However, US exports to Russia were blocked for most of 2010 because of Russian restrictions on the use of chlorinated washes, which are widely used by US processors.

 

Russia's shrinking poultry TRQ reflects its desire to bolster domestic poultry production, and US exporters are beginning to transition away from Russia as a primary market. The high price of poultry, caused in part by the high prices for feed, are also limiting sales opportunities in Russia, according to an industry source.

 

This source said US exporters may not even fill this year's 330,000 tonne TRQ because the high price for dark poultry meat, which is typically the most popular type of poultry meat US producers sell in Russia, is hurting demand.

 

Russia also drastically slashed its TRQ for pork in the coming year. The 2012 TRQ is set at 350,000 tonnes, down from 500,000 tonnes in 2011. While the US was granted a country-specific allocation of 57,500 tonnes in 2011, there is no US-specific allocation in 2012, according to the announcement.

 

The 2012 pork quota is divided into 320,000 tonnes for fresh, chilled or frozen pork and 30,000 tonnes for pork trimmings.

 

Russia is promoting growth in its own domestic pork industry by launching new livestock production facilities and farms, Russian Prime Minister Vladimir Putin said in a July 22 government press release.

 

The beef TRQ for 2012 is set at 560,000 tonnes - divided between 30,000 tonnes for fresh beef and 530,000 tonnes for frozen beef - which is the same overall level as the 2011 TRQ. However, US exporters benefited in 2011 from a country-specific allocation of 41,700 tonnes for frozen beef, which has been eliminated.

 

The in-quota tariff rate for all meat TRQs will remain at 15%, and the out-of-quota tariff will remain at 75%, Putin said.

 

Putin hinted that Russia may agree to more generous TRQ levels in the context of its WTO accession talks, which it hopes to conclude this year.