November 17, 2011

Russian pork producers to lose US$650 million

Due to a decline on pork's import duties amid Russia's upcoming accession to the World Trade Organisation (WTO), Russian pork producers are expected to lose up to RUB20 billion (US$650 million) over the coming years, the National Union of Swine Breeders CEO Yury Kovalyov said Tuesday (Nov 15).

Specifically, the Russian government plans to reduce import duties on pork to 5% from 40%, while the current 15% duty on imported pork is expected to be lifted, Kovalyov said, adding that the move could result in a decrease in the price of live pigs by RUB10-15 (US$0.33-0.49) per kilogramme.

Kovalyov reiterated that the domestic prices of live pigs fell by RUB15-20 (US$0.49-0.65) per kilogramme in 2009, when Russia's imports of live pigs exceeded one million units. Russian swine breeders managed to convince the government to set the import duty on live pigs at 40%, he added.

Kovalyov also said that if the government continued to encourage domestic pork producers, investments into the industry could amount to over RUB200 billion (US$6.5 billion) in 2011-2015, the same level as in 2005-2010.

He added that according to the union's estimates, Russia's pork production is expected to continue to grow over the next five years.

In 2010, Russia's total pork production amounted to 2.330 million tonnes in carcass weight, while industrial pork production was at 1.297 million tonnes, according to the union.

At the same time, Kovalyov said that the production of individual domestic farmers is expected to continue to decline over the next years.