Rapid growth forecast in Russian turkey market

By Vladislav Vorotnikov

- Last updated on GMT

Related tags: Meat

Turkey meat production on the rise
Turkey meat production on the rise
Russia’s turkey production could grow up to eight times over the coming decade if all the projects announced so far are implemented, according to the country’s Statistics Service.

Analysts estimate that projects already announced for turkey meat production amount to a total capacity of 800,000t or US$3bn per year – and all of them are designed to be implemented before 2022. So the market size could reach 1 million tonnes (t) per year.

Yet others doubt that all of these projects will really be implemented. “Almost 70% of these projects are being planned by non-professionals,”​ said Naum Babaev, chairman of the board of directors at poultry and meat production holding company Damate, which is currently considering two projects for turkey production with a total capacity of 150,000t.

“According to our company’s top managers, the amount of turkey in the Russian meat market will grow by more than three times – up to 500,000t per year, or US$2.5bn by 2022. The current market volume is 150,000t, with only 90,000t of domestic production, with the current market value estimated at US$1bn,”​ he added.

Limited demand

Growth in production will also be accompanied by a fall in prices, say experts, as they doubt that the rate of demand for turkey will increase at the same rate as supply. As a result, Damate, for example, has decided to hold off on one of two previously announced projects for turkey production.

“We are already constructing a farm in Penza Oblast and we have been considering implementing a similar project in Tyumen Oblast. It was designed to produce 90,000t of turkey meat per year, but we have decided to hold off on it for a year-and-a-half,”​ said Babaev. He said the number of investors looking to get into the turkey production industry was frightening.

“We have to wait and see what our competitors are doing,”​ he said. “Once we have the Penza project implemented, which has a 60,000t production capacity, we’ll decide what we will do in Tyumen.”

Russia’s Ministry of Agriculture also doubts that the rate of consumption in Russia will exceed 300,000t in the foreseeable future. “In the coming decade we will see consumption of 300,000t – no more. Where will the rest of the volume of turkey produced go? It is still not clear,”​ said a spokesperson for the Ministry.

Related topics: Industry & Markets

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