December 4, 2013

 

Russia's meat production may grow at slower rate
 

 

Russia's meat production is expected to grow at a slower rate leading to 2016, when compared to the period 2008-2012, according to figures from Russian analytical agency, Agrorucom.

 

The average annual growth-rate for Russia's meat industry was between 15-20% between the period of 2008 and 2012. Yet, figures have indicated that, between 2012 and 2016, the industry will only experience 17% overall growth. 

 

Experts who authored the report said that the annual average growth will be 4.3% during the period, noting that it was a result of decreasing interest in the meat industry from investors. "After 2017, the development of the sector may stop", the report stated.


However, during the last four years, the Russian meat industry has shown strong growth, according to the report. "In 2012, production growth in actual terms amounted to 12.4% on-year, while compared to the level of 2009, when it is equal to 35%. Such stability can be explained by stable positive dynamics of growth in poultry and pork production segments. However, the production of beef and lamb continued to decline," the experts said.

 

Experts also cited an earlier forecast from the Economic Development Ministry (EDM), published in 2014-16. The forecast noted that Russia may increase meat production in 2016 to between 9.2 million tonnes and 9.6 million tonnes from 8.1 million tonnes in 2012. The forecast also added that imports will stand at 2.3 million tonnes to 2.6 million tonnes annually. However, the EDM also confirms that Russian producers will probably not be able to keep the same pace of growth after 2016, when the largest pork and poultry projects would have been completed.

 

"According to the forecast, the production of live pigs by 2016 will grow by 15.4%, and poultry will grow by 27.5%. The share of imports of pork products in 2016 will amount to 20%, against 25.8% in 2012; while poultry imports will amount to 8%, compared to 12.7% in 2012. Growth in the production of cattle for slaughter in 2016 will equate to 4.5%," experts at Agrorucom said.

 

However, experts noted that the industry will continue to suffer from a number of negative factors. In particular, the poultry industry will not continue active growth due to a lack of sales markets. "Russia did not establish large-scale exports of poultry abroad as its neighbour Ukraine did. While we can no longer work on import substitution, as in 2014, we will be able to fully cover our needs in poultry production," experts commented.

 

Due to the number of projects in recent years, pig farming will continue to see growth which may conclude in 2016. However, the number of investment projects in the sector is rapidly decreasing.

 

Meanwhile, African swine fever (ASF) is causing serious damage to Russian pig farms. According to Russian veterinary watchdog Rosselkhoznadzor, 76 outbreaks have been registered in Russia in 2013 alone, with the damage costing the industry US$1 billion. According to analysts, ASF has damaged Russia's pig investment potential, saying it could have been 30-40% higher than it is now.

 

Since the popularity of the meat among Russians is falling and likely to continue in the coming years, it has been reported that beef and lamb productions may not benefit from the current development.

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