September 12, 2013

Members of the Customs Union have entered a so-called "meat war" making international trade in the meat markets of Eastern Europe to face new challenges.

Meat producers in Belarus may lose up to 50% of their profits due to a recent ban on meat exports to Russia and Ukraine, as meat processing plants are urgently trying to redirect their meat supplies to other countries, primarily Kazakhstan and Azerbaijan, but the Ministry of Agriculture and Food of the country admits that it is an almost impossible task.

Russia's market is of great importance to the Belarusian meat industry. According to the country's National Statistics Committee, last year 100% of Belarus' live pig exports were sent to Russia. Deliveries for the year amounted to more than 100,000 animals, with a total value of US$24.6 million.

A spokesperson for the National Statistics Committee also said that despite its pork deliveries to Kazakhstan in 2012, the volume of delivery vary significantly as compared to Russia. Belarus exported more than 60,000 tonnes of pork valued at US$217.2 million to Russia, while to Kazakhstan it exported 250 tonnes, with a value of US$956,900.

Experts have described the situation as a "meat war", saying it could lead to very serious consequences for Belarus' meat industry.

Russia regularly bans meat imports from Ukraine, trying to force it to enter into the Customs Union. One month ago the supply of pork from Belarus was banned by Ukraine, as Belarus is Russia's main ally in the Customs Union. Now, because of the loud political scandal, Russia has introduced a similar ban with Belarus.

According to local agricultural analyst Vladislav Skulinets, the reasons for the bans are completely political. Without these two markets meat-producing in Belarus will not be able to hold out for even half a year - it is totally focused on exports.

In parallel, Russia has withdrawn its almost two-year ban on beef imports from Lithuania, with local vets predicting that meat exports to Russia from the Baltic States may soon fully recover.

"We have convinced Russia that our beef is of good quality. We may begin supplies again as early as next week," said Jonas Milius, director of the Lithuanian State Food and Veterinary Service. However, according to Milius, his service still has not been able to agree on the resumption of chilled pork exports to Russia, which is especially important for the country.

Given the current market situation and good context of political relations with the Baltic States, local producers are expecting that Lithuania has every chance to expect that Russia will soon cancel all import restrictions on pork.