January 22, 2018

Slowdown in pork demand, production, imports in Russia

Pork demand in Russia is waning and, coincidentally, production is also slowing down and likewise imports.

While consumer demand was generally strong in 2017, it was reported to be slowing in the second half of the year. Per capita growth in poultry meat consumption is outpacing pork, aided by the expansion of fast food chain restaurants.

From the 6% in 2016, growth in pork consumption slowed down to only 3% in 2017. This year only a 1% expansion is anticipated, reaching 3.32 million tonnes.

According to the UK Agriculture & Horticulture Development Board (AHDB), production growth is also expected to be as slow as last year when output grew only 3% to 2.96 million tonnes from 2016, slightly lower than anticipated. This year production expected to be at only 3 million tonnes.

ASF threat

African swine fever (ASF), which continued to spread throughout Russia in 2017 and which will likely continue to do so in 2018, may be constraining pork production growth, along with market saturation, AHDB Pork said.

Russia also currently implements a "temporary" ban on pig meat imports from Brazil, which supplies 90% of its imported pork. "If this ban were to remain in place, could domestic pork producers scale up to compensate?" AHDB Pork asks.

Nonetheless, AHDB adds, a reduction in imported supplies would help mitigate the increasing saturation on the Russian pork market. With export opportunities limited, domestic demand is key to supporting the Russian pork industry, it said.

Furthermore, AHDB Pork said the removal of Russia's current primary supplier of pork imports could tighten supplies, support prices and enable further expansion, a view shared by an official at Russia's Ministry of Agriculture.

"This could then help Russia achieve its goal of self-sufficiency in most agricultural products by 2024; for pork this figure is currently around 90%", AHDB Pork said.

It added, "Ultimately however, it remains to be seen whether Russia will try to cope with further restricted pork imports for long, and whether the industry can expand to accommodate, given its serious problems with disease".