According to the Director General of the National Union of Swine Breeders Yuri Kovalev, last year Russia achieved self-sufficiency in pork, and production growth will continue in 2019. Industry resources will arrive, and the level of demand will not change significantly. As a result, the average wholesale prices will drop by 5-10% compared to last year.
Nevertheless, if we analyze the situation of Q1 2019, it turns out that the average price of pork was 7-8% higher than in the same period of 2018, Kovalev noted. However, it should not be forgotten that in Q1 2018 the price of pork has decreased to a minimum in the last five years.
The ban on imports of meat from Brazil was the only factor that provoked a price increase in Q2 2018. Now we are returning to the situation of January-March 2018, Yuri Kovalev believes. He is confident that with each month the gap will widen and we will smoothly enter into a downtrend: pork prices in the second half of 2019 will decline under the pressure of high supply.
Of course, the epidemic of African swine fever in Southeast Asia is reflected both in the world market and in Russia. "Now Brazil is open, but we do not expect a significant increase in imports of Brazilian pork at dumping prices, which could have been formed several years ago due to the real devaluation and a decrease in the supply of meat from Brazil to foreign markets," Kovalev specifies. "Now the world market is in a positive trend: average world prices have risen by 15-20%, and it is unprofitable for Brazilians to supply pork to Russia at prices below market." In the end, this will have a positive effect on the market situation in Russia.
Source: meat-expert.ru.
