November 17, 2010

 

Russian poultry moves towards self-sufficiency

Internal output growth and a decrease in import volumes have defined the development of Russian poultry market over the last five years.

 

Consumption growth has been essential, although it has lagged behind rates of increase in production. In 2009, despite the crisis, poultry farming was on a steady increase in Russia, with poultry production growing by 4% in comparison with 2008.

 

In addition the volume of poultry imports in 2009 was reduced to 19.4%. The import quota size for 2010 was defined at 779,200 tonnes, including 600,000 tonnes from the USA – equating to 77% of Russia's import quota for poultry and about 17% of the country's consumption.

 

Considering the existing problems of the American exporters using chlorine for processing of poultry, the actual volume of deliveries within the limits of the American quota will essentially be lower.

 

According to the agency "RosBusinessConsulting" (RBC), by the end of 2010 cumulative Russian imports of poultry, including deliveries from the CIS, will have decreased by almost 20%.

 

The forecast for 2009 predicted a reduction in the share of imported meat in the Russian market to 25%, when the reality indicates about 28%.

 

In the first half of 2010, according to RBC, only 22% of poultry consumed in the country came from abroad. As a result, domestic poultry production in 2009 was 17.6% higher than the 2008 level. In addition, beef output, including veal, decreased by 17.8% and mutton by 19%, with pork production increasing by 27.7%.

 

The preservation of import quotas as a distributional mechanism of meat and meat products for the whole production process also promotes the maintenance of a positive Russian poultry industry.

 

The competition between home producers in the domestic market will intensify when imports decrease further and the market is substituted by produce from Russian poultry farms.

 

According to RBC, poultry consumption grew by 2.5% in 2009, although the 2008 prediction was 6.8%. Therefore, some regions had a temporary overabundance of supply as a consequence of weakening demand. Despite a reduction in the growth rate of domestic production, expected competition should strengthen the market over the next three years. The main reasons for this reduction are current financial problems for some producers and the need for modernisation and expansion.

 

According to the latest studies poultry consumption is predicted to grow at rather low rates and in 2012 will exceed the level of 2009 by 5%. During the same period the volume of domestic production is expected to increase more than 24%.

 

Within the last 10 years, the share of poultry consumption equalled to about 35%-37% of the overall meat consumption in the Russian market.

 

According to The Ministry of Economic Development of the Russian Federation, poultry consumption per capita in the country may grow up to about 24.8 kg in 2010 and to 26 kg in 2012. This is due to an expected growth in annually incomes from 2010-2012 of 1%-2%.