October 28, 2004

Significant Rise in Russia's Beef, Pork Prices

Russia recorded significant increases in wholesale meat prices in the last 12 months. Domestic beef prices increased 15 percent, while imported beef prices grew 34 percent.

Pork prices, domestic and imported, rose 70 percent and 40 percent respectively during the same period. In particular, a significantly higher increase in pork prices was observed in the last two months. In the July to September period, prices for domestic pork grew by 27 percent, and imported pork rose 17 percent. 

Prices for pork increased more than beef due to the difference in availability on the Russian market. CIS member state Ukraine has been providing out-of-quota beef (N.B., Russia imported 144,000 MT of beef or 29 percent of total beef imports from Ukraine in 2003.)  Comparably large volumes of pork are not available from CIS member states.

The key factors leading to higher prices for meat and poultry in the Russian Federation have been the import quotas and tariff-rate quotas (TRQ) imposed by the Russian government. The situation was further compounded by an average grain harvest and higher-than-expected grain exports in the 2003/2004 grain marketing year. 

Since then availability has been reduced by poultry and cattle disease outbreaks in different countries that have traditionally supplied the Russian market.

Besides suspending US beef imports due to bovine spongiform encephalopathy in December 2003, Russia has also banned imports of all uncooked livestock products from China and Brazil. The Russian Veterinary Service imposed the restrictions in September 2004 due to concerns about foot-and-mouth disease. 

Brazil shipped 24 percent of Russia's total beef, 62.5 percent of pork, and 18.4 percent of poultry imports in January-July 2004. The country ranked second after the United States in poultry deliveries in January-July 2004.  In total, Russian January-September 2004 imports of meats are down by 26% compared with the same period a year earlier.