Russian meat industry set for single digit growth

By Vladislav Vorotnikov

- Last updated on GMT

Russian meat industry set for single digit growth

Related tags: Meat

Russia's meat industry grew by 4% for the past 12 months based on current forecasts sourced from the country, according to Russia's Minister of Agriculture Alexander Tkachev, with turkey the fastest growing segment.

If so, the growth would be exactly the same as in 2016. Russia has increased poultry production by 7% to 4.9 million tonnes, while the country's pork industry has added 5% in volume to around 3.55 million tonnes (t), the Minister has estimated, not saying anything about other types of meat.

In comparison, the Meat Union of the Eurasia Economy Union has the same forecast on the growth of poultry production, but believes that the pork industry will increase volume by 3%, compared to 2016, to 3.5 million t only. Beef production, on the other hand, will keep stagnating at the level of about 1.6 million t, just as in the previous year.  

Production of turkey meat is expected to be the fastest-growing segment of the Russian meat industry in 2017, adding 23% in volumes on year-to-year comparison to 270,000 t, the Meat Union estimated.

Musheg Mamikonyan, chairman of the Meat Union, explained that turkey meat is enjoying growing popularity among Russian consumers, because it is considered as a healthier type of poultry meat than chicken.

Highest consumption, lowest prices

Meanwhile, it is believed that average meat consumption in Russia has almost recovered to its highest level to date of 76kg per capita, registered in 2013. It had slumped to less than 73kg per capita in 2014 following the economic crisis in the country.

In 2017 average meat consumption in Russia is expected to be around 75kg per capita, up 3% up on the previous year, Yuri Kovalev, chairman of the Russian Union of Pork Producers outlined, speaking at a conference in early December.

Russia has increased poultry consumption by 5.6% to 33.5kg per capita and pork by 4.8% to 25.7kg per capita compared with 2016, Kovalev informed.

Russia's State Statistical Service has estimated average meat consumption at closer to 75.5kg per capita in 2017. In this regard, Russia’s Healthcare Ministry has insisted that the consumption of meat should not grow any further, as it has already exceeded its recommendations of 73kg per capita.

Consumption is growing primarily because prices for the main types of meat are under strong pressure. The purchase price for poultry fell by almost 25% from December 2016, dropping to RUB80 (US$1.35) per kg, according to data from the Russian Food Union, while the price of pork reduced by 15% to RUB94.50 (US$1.55) per kg, according to the Union of Pork Producers.

Prices are falling due to an oversupply problem in the domestic market, and a further increase in domestic meat production would put additional pressure on the sector, Kovalev warned, forecasting that with a further 10% reduction in prices, which is anticipated in 2018, up to 50% of the country's pig farmers could become loss-making in 2018. 

Related topics: Analysis, Russia, Poultry, Lamb, Pork, Beef

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