Russian beef and veal imports fall as consumers baulk at rising prices

By Eugene Vorotnikov

- Last updated on GMT

A rise in the price of imported beef and veal is seen as a benefit by domestic firms
A rise in the price of imported beef and veal is seen as a benefit by domestic firms
The global increase in commodity prices for beef and veal has dampened demand in Russia for imports of these meat products. 

The country’s Ministry of Agriculture revealed that imports fell 18.6% from January-May 2017 compared to the same period in 2016, That was mainly due to a rise in import prices, which have gone up by almost 25% since the beginning of 2017, said ministry officials.

Ministry of Agriculture data showed that from January-May, 32,300 tonnes (t) of beef and veal were imported into Russia. With imports from the European Union (EU), the USA and Canada blocked, the largest foreign supplier of beef is currently Russia’s neighbour Belarus, which accounts for almost 85% of supplies. Among other major suppliers are Argentina, Brazil, Colombia, New Zealand, Paraguay, Uruguay and Japan.

A spokesman for the Ministry of Agriculture commented: “The average price of imported beef in January-May 2017 amounted to US$3,700/t. This is almost 22% more than in 2016.​” This reflects international data trends, which indicate that imports of Australian and New Zealand beef into the US in December 2016 were US$173.98 per pound (lb), but had risen to US$206.16 by June this year (figures from IndexMundi).

Meat production to rise

However, the Russian ministry official said there was a potential benefit for the Russian beef sector, which could grow local market share as a result: “This provides a chance to increase domestic production, which is growing this year.​”

According to the ministry, in January-May (2017) beef production volumes in Russia (excluding offal) amounted to 60,400t, up 2.4% year-on-year.

Financial crisis in Russia

Speaking to GlobalMeatNews​, Russian farmers warned that the decline in beef imports could be linked to softening demand among wary consumers, worried about ongoing economic uncertainty in Russia and eschewing more expensive beef for cheaper pork and poultry. This is especially the case for imported beef and veal, which is generally more expensive than Russia-produced cuts.

With the USA ratcheting up sanctions against Russia, Vyacheslav Smauts, head of Voronezh-based Smauts & Partners, a major central Russia food producer, noted: “The financial crisis in Russia has had a negative effect on the local meat market and has resulted in the overall decline of meat consumption in the country. Prior to 2014, average annual per capita meat consumption in Russia was equivalent to about 75kg. However, since that time, it has declined to almost 70kg. Some consumers have decided to shift to fish, where consumption has also declined, but not to the same extent.​”

He said beef imports were focused on the largest cities in the country, especially St Petersburg and Moscow, where the consumption of beef, including imports, has “remained at almost pre-crisis levels​”. But consumption has fallen significantly in the Russian regions, he said.

Related topics: Analysis, EU, Russia, Beef

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