Russia sees sharp drop in poultry exports to Asia

During January-November 2015 the country exported 24,000 tonnes (t) of poultry compared to 31,000t in the comparable 2014 period, according to a report from Russian analytical agency Emeat.

Fierce competition in Asian markets were partly to blame for the decline, noted the report, which revealed that exports to Hong Kong this year dropped nearly fivefold – from 20,000t to 4,000t. Meanwhile, there was a twofold drop in supplies to Vietnam and Thailand. An unexpected source of support for Russian poultry exports came from Ukraine, which purchased more than 10,000t of Russian poultry meat in the period.

“Despite a significant devaluation in the rouble, it was difficult for Russian manufacturers to compete with their European and American competitors,” said the report. “If the quality of our products is comparable - and sometimes superior - to those of our competitors, Russian companies lag seriously behind their counterparts when it comes to marketing and promoting their products​,” said Emeat’s report.

“Without a full understanding of the structure of the global meat market, Russian companies are trying to offer their products in the highly competitive markets of Asia and the East, competing there with the world’s leading players, which have vast experience of international trade in meat. As a result, the cost of access to these markets will never be covered by potential profit,​” added the report.

Oversupply forecasts​

However, according to Russia’s Union of Meat Producers, the country has no choice but to develop meat exports as, in the next few years, it will produce more meat than it is able to consume. Representatives from Russia’s Agriculture Ministry have previously claimed that Russia could raise the volume of poultry exports to 50,000t-60,0000t by 2015 and to 100,000t in 2016. 

“In two years’ time, the domestic market will be oversupplied with meat, so meat and poultry businesses should be looking to export. Poultry can be delivered to the Middle East and North Africa and pork to China, South Korea and other countries of the Far East,​” said Mushegh Mamikonyan, head of the Union. According to his estimates, this year the volume of meat production in liveweight in Russia will total 9.2 million tonnes (mt), while imports will drop from 1.4mt in 2014 to 0.7mt.

Meanwhile, Anzor Boriev from chilled and frozen poultry agri-business group Resource has said that Russian poultry manufacturers also face problems in the markets of the south-east Asia due to local importers being ‘extremely picky​’.

“Given this, I recommend [exporters] to monitor and observe the quality of products required under the supply agreement and conduct an independent pre-shipment inspection. Also it is very difficult to secure direct contracts with importers as the markets in the region are characterised by price volatility, with prices changing almost on a daily basis, as well as an extended period of delivery that lasts an average of 40-45 days,​” he stated.