Russia to begin meat exports to crisis-ridden Venezuela

By Vladislav Vorotnikov

- Last updated on GMT

Russia to begin exporting to Venezuela
Russia could help Venezuela overcome an acute food crisis by exporting meat products to the country, with part of the costs subsidised.

Russian meat manufacturers have been authorised to export meat to Venezuela from regions free of African swine fever, avian influenza and foot-and-mouth disease, Russian veterinary body Rosselkhoznadzor said in a statement on 23 May.

Some meat processing companies in Russia have already expressed interest in exporting products to Venezuela, Rosselkhoznadzor claimed, but did not provide further details.

In 2018, Russia increased exports, primarily food, to Venezuela by 24% compared to the previous year. For instance, Venezuela imported 257,000 tonnes (t) of wheat last year at a value of US$56 million, the Russian Federal Customs Service has estimated.

Speaking earlier, Hector Rodriguez Castro, governor of Miranda state in Venezuela, said the country was aiming to rebuild its domestic food import system in order to purchase more products from new trade partners, like Russia, China and Iran.

In the past few years, Venezuela has been struggling with a food crisis, resulting in more than three million Venezuelans fleeing to other countries and up to 90% of local citizens reportedly having no means to purchase food, including meat products, in the required quantities.

The crisis has already driven domestic meat consumption to the lowest levels ever seen. Per capita meat consumption in Venezuela has dropped from 20kg per year in 1999 to only 7kg at present, according to estimates from the National Federation of Cattle Ranchers.

A matter of political will

Russia has been providing financial support to Venezuela for the past few years and sending humanitarian aid. It is believed that Russian meat exports to Venezuela would only make sense if there were state subsidies, which might be possible given the strong political ties between the two countries.

Before the current economic crisis, the size of the Venezuelan poultry meat market was around 700,000t per year in slaughter weight, with 100,000t imported​,” Andrey Dalnov, senior market analyst of the Russia’s biggest meat producer Cherkizovo, told GlobalMeatNews. “The local market could be interesting for Russian companies, but only on particular items, for example wings, which are cheaper in Russia than in Latin America​.”

Given the current problems in Venezuela, the country would be primarily interested in broiler carcases, but so far, Russian companies were not competitive on this item in Latin America, Dalnov said.

A political decision could change that,​” he added. “Some time ago, one of the main exporters to Venezuela was Argentina, where local exporters were getting bonuses based on intergovernmental agreements. However, Russian companies should be careful with these supplies, since the bankruptcy of one of the leading Argentine companies, Cresta Roj, is believed to be linked to its supplies to Venezuela. The company failed to get money for its products because of the complicated economic situation in that country​.” 

In theory, the Venezuelan poultry market could be of interest to Russian exporters, but only under the condition of full payment and attractive prices,​” Sergey Lahtyukhov, chairman of the Russian National Union of Poultry Producers, told GlobalMeatNews​. “Before the current crisis, the country was importing slightly more than 100,000t of poultry meat per year. Now, with the absence of an industrial livestock and poultry industry in the country, the demand for imported meat products is significantly higher​.”

However, Venezuela also borders Brazil, which is able to offer more competitive prices than Russia, given its geographical proximity and cheaper soybeans, Lahtyukhov said. This meant poultry meat exports from Russia to Venezuela would be mainly a matter of political will.

If some decision to provide a financial assistance to Venezuela were made, the necessary conditions would be to purchase domestic​ [Russian] products at prices attractive for our manufacturers and under certain guarantees​,” Lahtyukhov said.

At press time, Russia’s Ministry of Agriculture had not yet provided any information to GlobalMeatNews​ on whether meat exports to Venezuela could be subject to state aid.

Related topics: Others, Industry & Markets, Russia

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