August 10, 2009

Tight credit situation among local importers, the volatility of the rouble and dearer supplies from South America has resulted to falling 2008-09 beef imports to Russia by 2 percent to 704,436 tonnes slaughterweight (swt).

The downward movement of the local currency, in addition to lower local beef supplies and tighter imported supplies contributed to average import prices soaring 40 percent to US$3,618/tonne in 2008-09. Reduced imports from South America in 2008-09 resulted in higher volumes of Australian product, up over 300 percent on 2007-08 to 62,968 tonnes swt.

Local authorities struggle to increase local beef production through government subsidies as the profitability within the beef industry remains low. Beef production in Russia has declined 250 percent since 1999 with per capita consumption falling from 31 kilograms (kg) to 17kg during the period.

In contrast, pork and poultry production continues to rise, due to increased import restrictions and government support, although at a lower rate than consumption.

The Russian government has already spent already spending US$9.65 billion in investment credit for the industry and growing livestock breeding subsidies by 140 percent in 2009.