September 24, 2003

Russian Meat Prices Continue to Increase

According to local market researchers, meat prices continue to rise as a direct result of trade policy actions taken by the Russian Government.  Poultry consumers are the hardest hit-prices have increased by 46 percent over the last few months-due to the significant role that now artificially limited imports played in total domestic consumption.

Summary

According to local economic researchers, meat prices have continued to move upward since the imposition of import quotas and tariff rate quotas (TRQs) in May and April, 2003, respectively.  Particularly hard hit is poultry; domestic prices for this product have grown by 46 percent during the April-August period.  During a similar period, beef prices grew by 15 percent, while pork prices were mostly unchanged.  For the meat industry as a whole, imports are now less profitable, a fact which translates to higher consumer prices and reduced product availability.

General Price Trends

Table 1 offers domestic price data for the three main meat products in Russia. Notable amongst the figures is the rapid increase, by 46 percent in only five months, in poultry prices after the imposition of the import quota.  Also significant is the fact that the average price for poultry measured in August was a record for the previous ten months.  This increase is a direct result of restricting exports to a market that is expanding, and the inability of domestic producers to fill the gap between supply and demand.  The greatest price increase was seen for boneless frozen breasts (up to 80% on both domestic and imported products), while the price rise for chicken leg quarters was less significant.