Russia’s much wanted access into the EU poultry export market received a recent boost with the addition of another poultry facility being approved for exports. A quota issue means that progress is still slow, however.
The latest farm, a poultry farm of Russia’s largest meat producer, Cherkizovo, has been authorised to export chicken meat to the European Union (EU) from 1st November, a report of the company states.
The EU market a top priority
Andrey Terehin, head of Cherkizovo’s Export Development Department explains, EU members are large consumers and importers of chicken and turkey filet, so the European market is among the priorities in Cherkizovo’s development plan of the coming years.
Terehin also disclosed that Cherkizovo is already negotiating with some European partners for establishing a first trial supply of chicken to Europe. Russia has no quota for supply of chicken to EU, but the company expects this issue would be resolved as well, he added. Cherkizovo is now the 9th Russian meat manufacturer that has been allowed to deliver poultry to the EU over the past two years.
The European market is very promising for Russian poultry, as at the moment EU imports up to 1 million tonnes of poultry meat per year, Sergei Yushin, head of Russian National Meat Association explains.
Lack of EU poultry quota
At the moment, Russia has the ability to supply poultry only within quota for third countries, which are specially designed for potential exporters which don’t have their own quotas, Yushin says. However, the allowed amounts within this quota are dismal, while deliveries outside the quota are not economically feasible due to the extremely high custom duties.
Russia has been negotiating for several years already with the EU on allocating a special import quota on poultry meat, but so far no significant progress in these negations has been achieved.
According to Yushin, to allocate a special quota to Russia, the EU demands supply history, which can only be earned by the delivery of poultry within quotas for third countries. Some Russian companies which are already authorised to export poultry to Europe are making this history, but the process would take some time.
Export opportunities required
At the same time, market participants indicate Russia urgently needs to develop export supplies of poultry meat, as the domestic market this year shows signs of oversupply with falling prices and reduced pace of production growth.
According to Yushin, at the moment all of the most promising foreign markets remains closed for Russian companies, including China. During 2016, government officials expressed confidence that the first export supplies of poultry to China should take place at the end of the year. However, so far negotiations on the issue have slipped and it is not clear when export deliveries will be approved.
In addition, Russia is trying to export its poultry products to the Middle East and North Africa, but development in this direction is also slow, partly because of strong competition of other exporters, such as Brazil, Yushin explains. However, according to forecasts of the Russian Agricultural Ministry, this year Russia may export poultry worth US$20 million overall.