Eight years ago, Russia was one of the main importers of pork, but already last year the country became a net exporter. In January-June 2020, exports of pork products increased by 96% compared to 2019 and reached 88,000 tons, with 60% of exports being meat, although earlier two-thirds of exports were offal. In the absence of force majeure, by the end of the year Russia will be able to export about 200,000 tons of pork worth $ 300 million, and the export of all types of meat may approach $ 1 billion.
This year, Russia may reach a record export rate, although a few years ago the country was heavily dependent on pork imports. According to Yuri Kovalev, the general director of the National Pig Producers Union of Russia (NSS), 2018-2019 became milestone years: in 2018, the Russian Federation achieved almost complete self-sufficiency in this type of meat, and in 2019 the country became a net exporter and completed the most serious stage of dependence on imports. Meat market experts call this case unprecedented: in 2012-2013, Russia shared the first place in pork imports with Japan (then Russia imported more than 1.25 million tons of this type of meat), and after a few years it achieved complete self-sufficiency.
However, the main driver of growth was not the 2014 prod-embargo, although it became one of the incentives. "We started this process (import substitution) earlier - in 2005-2008," adds Kovalev. As we reached self-sufficiency, internal competition sharply increased, due to which wholesale prices fell, this became especially noticeable in the last two years: in 2019 they decreased by 8% to the level of 2018, this year - by another 10 %. As a result, pork consumption in the first half of 2020 increased by 5.2% or 95,000 tons.
The cheaper pork is the only driver of meat consumption in Russia. "I think all consumers will agree that such cheap pork has not been available in retail in recent years," says Kovalev. In addition, prices for chicken, beef and fish do not show such a downward trend. At the same time, by the end of the year, the cost of pork will grow by 10% due to the devaluation of the ruble and the pandemic. Combined with lower prices, this may further worsen the financial position of producers.
Pork production in the industrial sector in January-June 2020 amounted to 2.34 million tons, which is 12.6% or 261,000 tons more than the results of the first six months of 2019. All forecasts indicate that the active development of pig breeding will continue for the next four years. According to Kovalev, the top 20 pork producers, which account for 70% of the market, plan to increase production by another 47% during 2020-2024. "These are the most efficient, qualified companies that cannot make rash decisions," he adds, adding that an increase in production of 1 million tons (carcass weight) in four years will not be superfluous. 300,000 - 350,000 tons of this volume will be used to increase consumption as prices decrease. Another 200,000 tons should compensate for the falling production volumes of companies that go bankrupt, 150,000 tons will cover the decrease in output in private farms, 50,000 tons - for a decrease in imports from 100,000 tons, another 350,000 tons will be exported.
This year will be the first in the past 30 years when Russia has hardly imported pork, Kovalev emphasizes. So, according to the NSS, for the six months of this year, its imports amounted to only 1,000 tons, which is 60,000 tons less than a year earlier. According to Kovalev, the introduction of a 25% duty on the import of pork, of course, reduced imports, but the main factor is the growth of domestic production and strong competition between domestic players.
Source: meatinfo.ru.
