November 15, 2008


Russia audit of US pork plants sparks trade fears


Russia, after months of strong imports of US pork this year, sent a team of auditors to production facilities here in October, prompting concern among US government and industry officials that Russia might bar some of them from exporting.


There is reason for concern that US pork producers could be barred after this latest audit, according to USDA officials who asked not to be named because the audit findings haven't been released.


Russia has cut the flow of US agricultural exports after similar audits.


Russia and the US have clashed often over the past several years on poultry trade. Russia blocked exports from US poultry plants in 2003 and 2004 after they said they found violations during inspections of US production facilities. In 2006 Russia reorganised its licensing system for poultry imports that threatened to stop all trade.


Russia possibly won't "de-list" any US pork plants, but the fear is real, another USDA official said. Producers here have December contracts to fill, and there's no word back yet from Moscow on the results of the audits.


The Russian audit team visited 29 US pork plants during the second half of October, USDA spokeswoman Laura Reiser said. "This was a routine audit that other countries also do. We do that same in countries that export to the US".


If Russia does want to limit its imports of meat to the US, pork is a prime target, according to data maintained by the National Pork Producers Council (NPPC).


In August alone, the US sold 17,009 tonnes of pork to Russia, making the January-August eight-month total 96,084 tonnes. And that is nearly double the yearly tariff-free quota of 49,800 tonnes allowed by Russia.


Industry representatives say US pork sales to Russia have tapered off over the past couple months because of the rising strength of the dollar against the ruble and the global financial crisis.


Nick Giordano, vice president and counsel on international trade policy for the NPPC, said he expects the trade environment to improve over the coming months, but he also expressed concern over the Russian audits of US plants last month.


Giordano said he wasn't aware of any problems but that sometimes "politics enter into" the audit results.


The "exit interview" conducted with Russian auditors after they had visited the US pork plants went well but that isn't necessary a good sign, said a USDA official involved in the process.


The Russian auditors will not be the ones writing the findings report, which could lead to the delisting of certain plants, the USDA official said.

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