July 4, 2022
Cost of pork in Russia to grow at fraction of inflation rate this year
The retail cost of pork in Russia in 2022 will grow at a fraction of the inflation rate due to the increase in production of the meat and the stabilisation of the cost structure, according to Yury Kovalev, director general of the National Union of Pork Producers of Russia.
Kovalev noted that there is now a consistent development of the pork industry in the country. The industry has been growing at a rate of 5-10% a year for the last ten years.
Last year, there was such growth, but epizootic problems nullified the increase. Kovalev said that the problems have been overcome and production continues to increase.
In the first six months of 2022, there was a 7% growth in the industrial pork sector. "Given the fact that we are almost 100% self-sufficient, this additional growth naturally pressures the market. Last year, the additional supply was mostly offset by lower imports, increased exports and increased consumption," said Kovalev.
This year, imports of pork products in Russia will be practically nil. Exports are not expected to increase this year due to last year's growth. Thus, as Kovalev noted, under a favorable and baseline scenario, the additional supply in the pork market will be offset by additional demand. In his opinion, this will happen due to the increase of state social payments to the unprotected segments of the Russian population.
"In this case, wholesale prices for our products - live pigs - will remain at last year's level. This will greatly reduce the pressure on retail prices, which always lag behind the wholesale prices," said Kovalev.
He added that stable grain prices due to the effect of grain dampening in Russia contribute to the stabilisation of meat prices.