September 7, 2012

Russian beef imports on 2% decline on-year

Russia's beef imports decline 2% on-year ago levels, with frozen beef imports dropping 4% on-year, to total 322,206 tonnes, while chilled beef imports rise on the corresponding period, up 41%, to 21,560 tonnes.

The depreciation of the Russian rouble throughout 2012 has increased the cost of importing beef into Russia, contributing to the decrease in overall imports. So far in 2012, the rouble has averaged 5% weaker against the USD compared to the 2011 average. The depreciation was particularly severe during June and July, which is also historically the peak season for beef imports into Russia.

Russian quota usage for frozen beef to the end of July reflected the sluggish import market, with overall frozen beef quota utilisation at 51% of the allocated total. The current Tariff Rate Quota (TRQ) system allocates 530,000 tonnes of frozen beef to be eligible for import at a 15% in-quota tariff rate. Australia has access to a 407,000 tonnes TRQ, designated for a number of 'other' nations, of which utilisation at the end of July stands at 57%. The EU (60,000 tonnes), the US (60,000 tonnes) and Costa Rica (3,000 tonnes) all have access to country specific TRQ's, of which all were relatively under subscribed to the end of July.

Chilled beef can gain access to Russia under a 30,000 tonne chilled beef TRQ, although the EU is allocated 29,000 tonnes of this, with 'other' nations including Australia sharing access to only 1,000 tonnes. Although access is limited by this small chilled beef TRQ, a high quality beef import can enter above the chilled beef TRQ at a 15% tariff rate. To the end of July, only 33% of the 'other' chilled quota had been utilised, while out of quota imports totalled 881 tonnes.