Russian meat market faces low demand

While Russian government says its huge financial support has helped the Russian meat industry to overcome the negative effects of the crisis, industry analysts are not so optimistic.

According to the Ministry of Agriculture, the level of meat and agricultural production in Russia in 2009 grew by nearly RUB40 billion in value terms, compared to 2008 and amounted to RUB3 trillion.

However, industry analysts said that despite some stabilisation of the macroeconomic situation and improving of the liquidity in the financial sector, the situation in the meat and agricultural industries remains difficult.

Currently, most of the industry's enterprises are facing with low demand and lack of credit resources. Despite of the relatively strong position of the Russian meat industry as a whole, most of its sectors have been significantly impacted by the consequences of the crisis.

Although Russia was able to increase the production of poultry and pork, the level of beef production in the country remains low.

Mushegh Mamikonian, chairman of the Russian Meat Union, believes that investing in beef production is still unprofitable for farmers. According to him, grassland farming still has no prospects in Russia, while beef production remains a derivative of the dairy industry.