Russia’s currency crisis and a strong domestic commitment to pigmeat production will combine to prevent EU pork exports from regaining a share of the Russian market, according to a leading market analyst.
Irrespective of any progress which may be made this year concerning the lifting of Russia’s ban on food imports from the EU and other western countries, the view from GIRA consultant, Richard Brown, is that EU pigmeat will continue to be shut out of the Russian market for the foreseeable future. He also believes non-EU supplies into Russia will be extremely limited.
“Russia is having an absolutely bizarre year which is more impacted by currency devaluation than anything else,” he told Pig World, adding that, as such, the country would import a “very considerable less” amount of pigmeat going forward than in the pre-ban days of last year.
“This is all to do with currency rather than either politics or disease,” he said, commenting after addressing the annual conference of the Scottish Association of Meat Wholesalers in Glasgow.
While stating that GIRA believed manufacturing beef would eventually flow back into Russia, especially from South America, the long-term prospects for marketing large volumes of pork in the country weren’t as positive.
“With the possible exception of very specific things such as pork fat, for which Russia has a requirement, we’re not expecting pork imports to whoosh’ back into Russia,” he said.
Asked for a view on Russia’s stance in relation to the African Swine Fever (ASF) issue, the point on which the country’s February 2014 ban on EU pigmeat was based, Mr Brown replied that it was simply “going to worse”.
In addition, while noting that Canada and the US were both exporting significant amounts of pork into Russia prior to the general food ban being introduced in August, his view of the market today doesn’t include the prospect of a simple return to a similar situation in the future.
“The reality today is that pig production in Russia is very profitable,” he said. “It is also largely owned by quite powerful people and, although the country’s banking crisis is likely to stall their investments generally, they will finish what they have started and will work on their productivity, based on what they have already created.
“As a result, there will be a lot more Russian-produced pigmeat in the market than there was in the past. It is also important to note that it is not the current political ambition in Russia to have a lot of imported pigmeat entering the country in the future.”
GIRA is a strategic consultancy and market research firm founded over 30 years ago and operating in the drink and food sectors, while also covering the global food-based retail chain.