November 24, 2009

Credit problems strangle Russia's meat supply

Russia is facing an imminent meat shortage, as importers are having difficulty in accessing credit where interest rates could reach as high as 20 percent.

The Russian government feared that a lack of meat supplies may stop the production of the largest meat processing plants in the Moscow region, as it did back in 2006.

The current economic crisis has led to a downturn in meat demand in Russia and increasing popularity of discounters. The devaluation of the rouble also meant that Russia can no longer afford to import expensive meat from the EU and the US, and the country now plans to enter the markets of Central and South America.

For the next several months, Russia may start negotiating for an increase of meat imports from countries such as Brazil, Nicaragua and Venezuela.