Politics and pigs have met once again in the political arena with Russia’s Aug. 7 ban on Canadian pork and other agricultural exports.
Canada’s sanctions on Russia over that country’s actions in the Ukraine drew the retaliatory one-year ban, and the pork industry has more pigskin in the game than most other commodities on the list.
It was on track to export about $500 million worth of pork to Russia in 2014.
However, pork industry officials said the ban is unlikely to have an effect on prices given current global demand for pork and Russia’s previous record on Canadian pork trade.
They are looking to processors to divert pork shipments already en route to Russia, and to find other markets for pork. Maple Leaf in Lethbridge, Olymel in Red Deer and HyLife in Neepawa, Man., and others in Ontario and Quebec, all ship pork to Russia.
“I’d be surprised if (processors) were surprised by this announcement,” said Alberta Pork chair Frank Novak.
“The Russians are notoriously unreliable anyway. It’s not the first time they’ve played games with stuff, most recently the ractopamine thing. So I can’t imagine the major exporters to Russia not working on plan B before this announcement was made.”
Last year Russia banned pork from animals fed ractopamine, a growth promotant, which temporarily disrupted trade. About $260 million worth of pork was sold to Russia that year, down from $492 million in 2012. Russia is Canada’s third largest market for pork.
The Canadian government said Russia’s ban would not affect the country’s foreign policy on Russia and Ukraine.
“We will not be intimidated by these kinds of tactics,” said industry minister James Moore. The prime minister’s office also issued a statement indicating Canada “will not allow business interests alone to dictate our foreign policy.” However, it said the effects of the ban on Canadian trade would be monitored.
Russia also banned product from the United States, European Union, Australia and Norway.
“This is politics and again our producers are getting mixed up in politics,” said Manitoba Pork Council chair Karl Kynoch.
“It’s going to hurt (Russia’s) own consumers and artificially raise the price for their own people. Maybe the people of Russia are actually going to hurt more than our producers in Canada.”
Jacques Pomerleau, president of Canadian Pork International, shared that opinion.
“I’ve never seen a country taking self-inflicting sanctions. And on food products on top of that,” he said.
“The impact will be much bigger on the Russian processors than on us, because they banned the U.S. and EU pork over the last few months, so they were left with very few suppliers, i.e. Canada and Brazil. So if you ban Canada on top of that, where do you think the processors will get their raw material in Russia? It’s very critical for them.”
Some groups are calling for the federal government to assist Canadian companies that may be harmed by Russian retaliation to Canadian foreign policy.
The Canadian Manufacturers and Exporters said an emergency fund would provide short-term relief to food exporters and equipment manufacturers who do business with Russia — or did until the one-year ban was announced Aug. 7.
Gary Stordy, spokesperson for the Canadian Pork Council, said prices realized by hog producers are unlikely to be affected in the short term but future developments can’t be predicted.
“We certainly would welcome government assistance to help reduce or remove any barriers that would prevent us from selling some of the pork that would normally be destined to Russia,” he said.
“We do expect, and all indications are the federal government is willing to assist, that if we do find markets that would like to purchase this product, that the procedures and processes are seamless.”
Pork demand exceeds supply globally, in part because the fatal porcine epidemic diarrhea outbreak in the U.S. has reduced available supply
“When you take in the whole picture right now with high pork demand and a little shy on the supply of pork, hopefully other markets will be able to absorb this pretty quick,” said Kynoch.