Russia's pork imports rise amid low global prices
This was a rise of 42.5% on the same period in 2015, according to a report from the Russian Institute for Agricultural Market Studies (ICAR), which referenced official statistics from the country’s Ministry of Agriculture.
“One of the reasons for the rising supplies was a drop in the purchase price for pork on a global level, as they continue to be in depression,” commented Dmitry Rylko, general director of ICAR. “Another important factor was the devaluation of Brazilian real, as Brazil remains the major supplier of pork to Russia.”
At the beginning of 2016, Brazil became nearly the sole supplier of pork to Russia. ICAR analyst Daniel Khotko explained that, in 2015, Russia imported 297,000t of pork, of which 232,000t or 76% came from Brazil. The rest mostly came from Ukraine, but supplies from this country have been stopped since the beginning of the year, due to the food embargo.
Domestic price growth
“After the ban on supplies of pork from Ukraine, its market share was taken over by Brazil, so in January-February it accounted for 92% of overall Russian pork imports, or 24,900t out of 27,200t,” said Khotko.
He added that, in January this year, Russia imported 10,500t of pork versus 3,500t in January 2015, while in February it imported 16,700t compared to 13,000t in January of last year. ICAR experts believe the rise in prices for pork in Russia was mostly associated with the low purchasing prices on the global market.
Khotko explained that, in January this year, pork cost US$2.50 per kg, while the price in February fell to $2.30/kg. The average price in 2014 was $4.15/kg, while in 2015 it was $3.30/kg.
Import rise not permanent
Price fluctuations have been seen in the domestic market, but generally they are on a downward trend. According to ICAR, at the beginning of 2015 the prices was RUB150-RUB160 (US$2.26-$2.41)/kg, but by summer they had increased to RUB170 ($2.56)/kg and decreased to RUB140-RUB145 (£2.10-$2.18)/kg by September.
“The rise in imports is probably a temporary trend, as the Russian market is seeing a fall in pork consumption and a significant number of new projects in the area of pork production. As a result, there is a real threat of pork oversupply in Russia, which could happen within the next two to three years,” commented Russian agricultural analyst Eugene Gerden.
“Russian prices today are higher than prices for Brazilian pork, but with a rise in oversupply, they will come under pressure. As a result, domestic prices should fall too, and production from the country’s agricultural holdings will push out imports very soon,” he added.
