December 10, 2007

US beef exporters eye Russian market as first sale made

Although conditions to re-open US beef exports to Russia are still being negotiated, the National Cattlemen's Beef Association (NCBA) said it has received word that US beef has been sold to Russia for the first time since Russia banned US beef due to mad cow disease fears in 2003. 

NCBA Chief Economist Gregg Doud said that although the deal, valued at US$500,000, was not market-moving, it holds historic significance.

Russia was once the largest importer of US beef liver.

The current deal involving the sale of US whole muscle meat cuts, may be the first of its kind, Doud said, adding that the market would be closely watching for additional sales.

Russia is already one of the world's largest importer of poultry meat, and imports slightly over 1 million tonnes of beef yearly, according to USDA estimates.

This would make Russia the second largest beef importer in the world, after the US ( US imports beef from Canada, which is mainly for processing).

The beef is mainly imported from Brazil and Paraguay, which counts Russia as its biggest market. Other major beef producers such as Argentina, Uruguay and Australia also regards Russia as a major market for their beef.

As energy prices rose in recent years, Russia, with massive energy resources, is benefiting from high prices. With economic growth at breakneck speeds, Russians have become more affluent in recent years and hence the rising demand for better nutrition in the form of animal protein

The falling US dollar and rising strength of the Brazilian real could soon take some of the pricing advantage off Brazilian beef and make US beef a more attractive option for the Russian market, the NCBA said.