Changes are afoot in the world’s largest meat importer that could cause Canadian pork exporters to face more competition.
Russia bought 2.4 million tonnes of meat in 2001, outpacing Japan by about 300,000 tonnes. But it now wants to rebuild the livestock production capacity that collapsed along with the communist government.
The United States Department of Agriculture forecasts Russia’s total meat production will climb five percent this year to slightly more than four million tonnes, but that is less than half of what it was in 1990.
Russia has brought in tariff rate quotas on beef and pork and a quota on poultry. The quotas are set at roughly two thirds of 2002 imports.
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The move is partly retaliation against the European Union for limiting Russian grain imports and partly an effort to help domestic livestock producers. Growing livestock production would also provide a domestic market for Russia’s mounting grain production surplus.
Canada’s interest is mainly in pork. Russia is Canada’s fifth largest pork market.
The largest foreign suppliers of pork products to Russia in 2002 were Brazil with a 60-percent share, the EU with 18 percent, China with 11 percent, and Canada with four.
The U.S. supplies most of Russia’s chicken imports.
In beef, the main suppliers are the EU with about 60 percent and Ukraine with 25 percent.
As Russia limits meat imports and builds domestic production, trade flows will change.
The process will be gradual because imports will probably continue for some time as the improving economy there pushes meat demand beyond what even a fast-growing domestic industry can provide. But over time, product that went to Russia will have to find a new home.
There will be little impact in beef. The major supplier, the EU, has few market opportunities because of importers’ fears about bovine spongiform encephalopathy.
Reduced Russian poultry demand will mainly be an issue for the U.S., facing strong global competition from Brazil.
Canada will be most affected in pork. The key issue will be how world hog powerhouse Denmark and fast-growing Brazil redirect exports formerly going to Russia.
They will present tough competition for the Canadian pork industry in its effort to increase production and diversify its markets away from the U.S.
