December 11, 2006

Russian pork producers' profits plunge as production and imports grow

Profits of Russian hog breeders have been plunging due to the increase in production and increased imports, according to the deputy head of the Russian Pork Producers Association, Vyacheslav Kozhevnikov.

At the beginning of 2006, the purchase price for one kilogramme of pork in Russia was 60 Roubles (US$2.28). Today, a kilogramme of pork has dropped to 43  Roubles (US$1.64).

Still, meat-packing plants preferred the lower quality imported pork, which are 10-15 percent cheaper, said Kozhevnikov.

A 10-percent growth of pork output is expected this year, but there would be no profits from pork production, which has grown 580,000 tonnes so far this year, Kozhevnikov said.

According to the Russian Pork Producers Association, imported pork already exceeded the quota by 87,000 tonnes in the eight months of 2006. Last year imports exceeded quota by 108,000 tonnes, reaching 580,000 tonnes. Kozhevnikov has urged the state to do more to regulate imports.