May 7, 2014

Russia's recent ban on imports of Australian beef has resulted in a sharp rise in the price of beef on the domestic market.

In particular, the price for high-quality marbled beef in Moscow has jumped from RUB810 (US$22.50) to RUB1,600 (US$44.50), according to local reports.

Regional departments of the Russian State Statistics Service have observed the same trend in almost all regions of the country, with the prices for high-quality beef rising particularly quickly.

Russian officials are urgently trying to find new suppliers. Head of Russia' National Meat Association Sergey Yushin said he expected Australian beef on the Russian market to be replaced by supplies from Latin America, initially from Uruguay.

Russian veterinary watchdog Rosselkhoznadzor, which has banned imports of beef from Australia, said it was also aiming to allow imports of beef from Japan, which is a large producer of marbled beef and could potentially be an interesting supplier.

Meanwhile, restaurant and retail commentators have noted that nobody wants to purchase Russian beef. Although it is 20% cheaper than imported beef, its quality is much worse in terms of taste and nutritional content.

The problem is that not only has Rosselkhoznadzor banned beef imports from Australia, but has also restricted the supplies from several important sources in recent years.

Meanwhile, analytical agency Agrorucom commented, "It is clear the price has still not reached its maximum level. The current situation may benefit any potential new importers; while it is very hard to match the demands of the Russian vets, the Russian market is now offering very attractive prices."