November 10, 2009

Russia's new meat quota system seen to attract more imports

A new system of meat quotas distribution in Russia could lead to a sharp increase in meat imports, according to Russian meat industry analysts.

The Russian government plans to put up nearly 30 percent of all meat quotas for the auction, with the view that it would make the local meat market more competitive.

But major foreign companies can buy these quotas at any price, and those companies would be ready to invest millions of dollars in order to take a bigger share of the Russian meat market, said Ivan Obolentsev, chairman of the Russia Agro-Industrial Unit. 

Russia media reported that Marfrig, and Perdigao and Sadia are considering to buy the quota to capture a large portion of the Russian market. 

Most Russian producers will not have enough financial muscle to compete with those huge foreign companies for the quotas, said Sergey Yushin, head of the National Meat Association.

The surge of meat imports into Russia could occur as early as the first quarter of 2010, said the analysts.