September 30, 2013

Following the introduction of a number of trade restrictions and some changes in the agricultural import policy, Russia has cut beef imports by almost 25% during the first seven months of 2013 compared to the same period in 2012.

The country imported only 292,000 tonnes of beef, including 257,000 tonnes of frozen beef, during the first half of the year, according to official estimates.

In August, Russia reduced the import of beef from non- Commonwealth of Independent States (CIS) countries by 33.3% to US$175.1 million compared to the same period last year, according to the Federal Customs Service. The situation was similar for previous months, such as in July 2013 Russia imported 27.2% less beef than in July 2012.

According to Sergei Yushin, head of the National Meat Association, the decline in imports was mainly due to a series of restrictions imposed by the Russian authorities against some key suppliers of beef this year.

"In addition, since last year, Rosselkhoznadzor, Russia's Federal Service for Veterinary and Phytosanitary Surveillance, has introduced a number of restrictions on the import of livestock products, especially from EU countries because of the Schmallenberg virus (since March 2012), as well as from the US due to the ractopamine issue (since February 11, 2013). As a result, the supply of US beef during the first half of the year dropped to 35 tonnes from 30,547 tonnes compared to the same period in 2012," added the press service of the National Meat Association.

However, during the second half of 2013, representatives from the Russian Ministry of Agriculture predict a recovery in beef supplies to Russia, mainly due to the lifting of a ban on UK beef imports, the partial removal of restrictions on imports of cattle from Europe, and the development of trade relationships with some new trading partners from South America.

"Imports are likely to recover, although their structure is about to change. Niches that were formerly occupied by the US, Brazil and Canada will now go to other suppliers - primarily the UK, which has a huge potential in our market, as well as countries such as Mexico and Argentina, which have promised to supply us with products without ractopamine," said the Ministry of Agriculture.

At present, the Russian market offers a price of RUB350 (US$11.20) per kilogramme of beef - a higher level than in most European countries. A shortage of beef in the market means the price looks likely to continue to rise, thus attracting foreign exporters.