December 27, 2010

Russia 2011 poultry tariff rate quota to have no country-specific allocations

The Russian Federation has set its 2011 poultry tariff rate quota (TRQ) at 350,000 tonnes and will not have any country-specific allocations to the US or other countries, as it has done in the past.

Although Russia has not made an official announcement to the US government on this issue, it divulged its intentions within the past two weeks when unveiling details of its joint customs union arrangement with Kazakhstan and Belarus. Kazakhstan will have a poultry TRQ of 110,000 tonnes and Belarus will have a TRQ of 15,000 tonnes, sources said.

The Russian TRQ will include imports of frozen chicken leg quarters, which is the main product that US producers ship to Russia, sources said.

However, the TRQ will not include whole chickens, which sources said will negatively impact Brazil because that is the primary poultry product that Brazil ships to Russia. Instead, these imports will be subjected to the higher, out-of-quota tariff. An informed source said Russia is likely to ban imports of whole chickens in 2011 because they compete directly with domestic production, sources said.

As the 350,000 TRQ does not include whole chickens, an industry source said it places the US in a good position to compete against other countries for the lion's share of the quota, although US exporters would have liked to see a bigger overall TRQ. Poultry exports that are shipped in excess of the Russian TRQ will be subjected to an 80% tariff, sources said.

Industry sources noted that the 2011 TRQ would still outpace the approximation of 250,000 tonnes of poultry which the US shipped to Russia this year.

The 2010 country-specific TRQ for US poultry was 600,000 tonnes, but US exports to Russia stopped for most of the year due to Russian restrictions on the use of chlorinated washes, which are commonly used by US exporters.

By the time the US industry was able to follow the requirements that poultry be washed with non-chlorine washes, only a few months were left so companies were unable to fill the quota. Sources said that Russia has long indicated that it is reducing its TRQ as it attempts to become more self-sufficient.