A temporary ban on meat imports from Brazil, the low cost of grain last season and rising prices for products will help pork producers earn a record 121B RUR ($ 1.74B) in 2018. However, the new year will show a worsening of the conjuncture. Market participants are afraid of a serious increase in grain prices, which may adversely affect their business.
In 2018, Russian companies of the pig sector will show a record increase in sales profits from at least 2015, follows from the Deloitte calculations. The analysis is based on accounting reports of almost 23 thousand agroindustry companieswith annual revenues of more than 1M RUR ($ 14.37K). According to analysts, by the end of the year, the operating profit of pork producers will increase by almost 80%, to 121.1B RUR ($ 1.74B). The sector's operating margin will increase from 18% to 29%. For comparison: the operating profit of poultry companies in 2018 will decrease by 1% to 39B RUR ($ 0.56B), the operating margin from 7% to 6%, Deloitte predicts.
Next year will be very difficult for the pig industry, Yuri Kovalev fears (National Union of Pig Breeders, director general). According to him, the resumption of imports from Brazil and the growth of domestic production will lead to an increase in the supply of pork by about 5%, which will adversely affect wholesale prices for products, and the rising cost of grain will put pressure on business profitability. The main risks are related to the expected increase in supply, mainly due to an increase in domestic production, Andrey Dalnov agrees (Cherkizovo Group lead analyst). He hopes that the average price of pork next year will be at least at the level of the current year.
Source: rynok-apk.ru.
