October 16, 2012

Russia sees rise in pork import volumes during Q3 of 2012

An increase in Russia's pork import volumes is seen during the third quarter of 2012.

This is most likely the effect of a reduction of customs duties on pork and live pigs, as Russia accessed the World Trade Organisation (WTO).

Sergey Yushin, head of the executive committee of the Russian National Meat Association, said that imports increased sharply after August, 23, as importers held back the supplying of pork waiting for better conditions of trade. He continued to say that from the end of August, they started to implement their licenses to supply pork, earning a good profit on the change of customs duty. Yushin added, "The average volume of import is significantly higher than in the previous six months, but the volume of remaining non-implementing licenses is very small."

Darya Snitkoby, an analyst for the Centre for Economic Forecasting of Gazprombank, said that in the beginning of August of 2012, imports lagged behind last year's levels by 3-4%, while in September a sharp increase occurred. As of October 2, already 516,000 tonnes of pork had been imported this year, according to data by the Russian Ministry of Agriculture.

In the first half of the year, about 280,000 tonnes of pork were delivered, so in the third quarter of 2012 the volume of imports of pork to Russia nearly doubled compared to the first and second quarter of 2012.

Yushin also said that the third quarter is a period of a seasonal drop of around 5% in prices. This year, however, the drop is 15%. Experts estimate this development could affect the profitability of many of Russian pig farms. This consequence, negative for Russian swine farms, has been predicted prior to the accession to the WTO.