USDA FAS has forecast an increase in Russian broiler meat production to reach 3.4 million metric tons (MMT) in 2015.
The increase is due to favourable feed prices resulting from a strong grain crop forecast, reduced domestic competition due to forecasted import reductions, and the Russian Ministry of Agriculture’s reported intent to extend support programs until 2018. Production in 2014 is predicted to be 3.2 MMT.
Despite price increases Russian broiler meat consumption is expected to rise 4% in 2015 and continue growing at a slow pace due to rising wages and competitive prices for broiler meat over other red meats. FAS revised previous consumption forecasts lower (less than 1%) for 2014, yet higher than 2013 consumption levels due to reduced imports resulting from government imposed trade restrictions on several suppliers in August 2014. Despite higher retail prices, broiler meat continues to be competitively priced compared to other proteins and is expected to account for a larger percentage of domestic consumption.
Previous forecasts of Russian broiler meat imports in 2015 were lowered 12% to be 340,000 MT due to increased domestic production and newly instituted trade restrictions. In August 2014, the Russian Government instituted a 1 year ban on the supply of poultry under HS Code 0207, among other products, from the US, EU, Canada, Australia, and Norway in retaliation to sanctions placed on Russia. The US shipped about 260,000 MT of broiler meat in 2013 and 50,000 MT from January-April 2014. The EU shipped nearly 65,000 MT of broiler meat in 2013 and 20,000 MT from January-April 2014. The August 2014 restrictions eliminated about 60% of total broiler imports in 2013 and during the first 4 months of 2014.
December 2014, Russia’s Veterinary and Phytosanitary Surveillance Service (VPSS) announced temporary restrictions on US poultry imports due to “the ongoing identification of harmful residues and banned substances coming from the US poultry products, including the presence of tetracycline” effective December 5, 2014 affecting poultry meat, by-products, and finished poultry meat products. Additionally, FAS recently released a report containing an outline of current Russian-Belarus-Kazakhstan Customs Union (CU) “Eurasian Conformity” labeling requirements following assessment of conformity for poultry and red meats (Gain Report RS1493).
Russia plans to increase imports from Brazil, accounting for about 9% of total broiler meat imports in 2013 and during the first third of 2014.
Yet in comparison Brazil’s exports to Russia were down 23% and 20% respectively from 2012 and the first third of 2013. Belarus’ share of imports has grown despite a decline in total import volumes. Together Brazil and Belarus accounted for nearly 30% of total Russian imports in 2013; however it is unlikely these countries can increase exports to fully replace supplies from the US and EU. As a result broiler imports in 2014 are expected to decline about 30% to reach 385,000 MT. From January-April 2014 the largest broiler exporters to Russia were the US (52,332 MT), Belarus (38,055 MT), EU (20,571 MT), and Brazil (11,686 MT). Another importer with potential is Turkey, who has reportedly increased broiler meat exports to Russia by almost 4.5 times in the first 9 months of 2014 versus the same period in 2013. Imports from India also seem to show promise in future as Russia recently announced the allocation of Indian buffalo meat and its plans to certify other agricultural goods such as poultry, powdered eggs, and dairy products. Conversely, Russia has placed restrictions on poultry imports (poultry meat, poultry products, live poultry, hatching eggs, down and feathers, feed and feed additives, housing and handling equipment) from Germany due to outbreaks of highly pathogenic avian influenza (HPAI).
Russian broiler meat exports are predicted to decrease to 15,000 MT in 2015. Previous forecasts for Russian broiler meat exports in 2014 were revised nearly 40% lower to 25,000 MT.
Russia and other CU members will continue to promote intra-CU, duty-free agricultural trade and take advantage of preferential trade conditions to expand exports; however more Russian domestic broiler meat production is expected to remain in Russia in 2014 and 2015 due to the ban on US and EU broiler meat. Plus, Kazakhstan, Russia’s largest export market, released its 2014 quota in a more timely manner (February and June) allowing other foreign suppliers to better compete with CIS suppliers like Russia to a greater portion of the year. In the first 4 months of 2014, Russia increased broiler meat exports, mostly sub-products like chicken paws, nearly 60% to 24,819 MT to Asian and African markets.