China has cancelled restrictions on Russian poultry imports which was originally implemented back in 2005 due to the unfavorable veterinary situation in the country.
The long-awaited decision could become an important milestone for Russian poultry manufacturers, since China is the biggest market and it could annually consume up to 200,000 tonnes of Russian chicken. This could promote a fast rise of Russian poultry exports within the next few years.
An important poultry market
According to the deputy head of the Russian Agricultural Ministry, Sergey Levin, exports of Russian poultry meat to China should begin by the end of the year.
“This is a very important step. Recently the Russian veterinary body, Rosselhoznadzor, has been working hard on the accreditation of Russian poultry businesses for deliveries to the Chinese market. How much time this work will take is hard to say, but we hope Russia will carry out the first deliveries in the near future. It is likely that this will happen by the end of 2016,” he said at a press-conference dedicated to the lifting of the Chinese restrictions.
Russian poultry exports
Last year, Russia produced 4.5 million tonnes of poultry meat, but only exported 70,000 tonnes, primarily to Asian countries, such as Hong Kong and Vietnam. Part of deliveries via Hong Kong has been redirected to China. The meat industry has a development strategy targeting overall poultry export of 400,000 tonnes by 2020.
Over recent years, almost all of the top officials of the Agricultural Ministry and the Russian Union of Poultry Producers have declared that the future development of Russian poultry farming will be largely dependent on exports, since the domestic market is already saturated.
An attractive poultry market
In this regard, exports to China seem very attractive. The Agricultural Ministry estimates the potential of the Chinese market for Russian chicken close to 200,000 tonnes per year, while the head of the Russian Union of Poultry Producers (RUPP), Vladimir Fisinin, has stated previously that Asian countries in general, and the Chinese market in particular, is very attractive for Russian manufacturers due to the different culture of consumption.
He suggested that a large part of exports could be for so-called chicken by-products, such as feet, which in Russia is considered as waste and does not go for sale to the open market. As a result, the RUPP’s members believe that the opening of the Chinese market could really change the situation for the country’s poultry industry.
At the same time, according to Russian agricultural analyst Eugene Gerden, the growth of the Russian poultry exports to China is not an inevitability, since this market already faces strong competition, including of foreign suppliers, while most Russian companies do not have a lot of experience in competing abroad.
At the same time, he says, Russian farmers can be really competitive on price due to the proximity of China to Russia, compared to Brazil and US. The devaluation of the Russian ruble which took place over recent several years could also be advantageous.