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BPEX reviews future Russian market prospects for EU producers

PW ReportersBy PW ReportersFebruary 24, 20152 Mins Read
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A fresh analysis of how the Russian pig market has changed in response to the country’s two 2014 import bans has been completed by BPEX, drawing mixed conclusions on the long-term prospects for EU suppliers.  

Quoting newly available figures, BPEX reports that Russia’s pork imports reduced by nearly 40% in 2014, the country slipping from a 2013 import total of 592,000 tonnes of pork to just 372,000 tonnes last year.

“The Russian pig market has often been unpredictable,” said BPEX. “However, even by Russian standards the last year has been unusually eventful.

“With pork imports banned from the EU since this time last year and from Canada and the US, among others, since the summer, supplies have been particularly tight. More recently, the devaluation of the rouble and the collapse in the global oil price have hit the Russian economy.”

The net result was that import prices rose steadily for Russian buyers as 2014 progressed, to the effect that by December they were more than double those of a year earlier in rouble terms.  This inevitably hit consumption.

In looking at what may happen when the bans are lifted, however, BPEX warned that a return to pre-January 2014 business should not be expected. 

“Russian pig slaughterings in 2014 were reportedly 12% up on 2013, continuing the strong growth trend of recent years,” said BPEX. “This has been driven by major investment in modern production, encouraged by the Russian government, which aims to become self-sufficient in the next few years.

“The long-term prospect is for the country to require less pork, and other pigmeat products, than it did historically,” concluded BPEX, albeit adding that the continuing rouble and oil troubles may have the effect of slowing down Russia’s self-sufficiency drive.

“From an EU perspective, this will be welcome, given the impact the Russian ban has had on pig prices. This is partly because Russia was a particularly important market for by-products, such as fats, for which there are few other buyers globally. Without these sales, the value of pig carcases is lower, affecting everyone in the supply chain.

“Anything which gives hope that the market for these products could return, even on a smaller scale than before, will be welcome.”

See full BPEX report

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