Analytics

Review of the Russian meat and meat products market*

In 2009 the actual volume of the meat and meat products market comprised 10,432.6 thousand tons, up 1.8% compared to 2008.

Increase in meat resources is caused by significant domestic production growth - by 6.7% com-pared to 2008 - against reduction in import of meat and meat products by 7.6%.

Domestic meat production growth resulted from pork and poultry production growth. By Ros-stat in 2009 pork production in live weight at farms of any categories went up by 8.7%, poultry production - by 14.7% compared to 2008. Beef production keeps on growing down (- 2.3% in 2009).. 

Dynamics of import indices (meat and meat products, including by-products, lard and so on) and domestic production indices for 2006-2009, thousand tons 

It should be noted that in recent years it tends to reduce the share of personal subsidiary plots and grow the share of agricultural organizations in meat production. If in 2007 agricultural or-ganizations accounted for 49% of total value of livestock and poultry production, then in 2008 they accounted already for 53% and 55% in 2009. The most noticeable growth of agricultural organizations'share is in pork production. In 2009 agricultural organizations produced 47% of pork, whereas just 3 years ago this index had been equal only to 36%.

Recent years' main gain in meat production was get at the expense of operating created capacities of poultry and pig industries that ensure the largest profitability of investments and pro¬duction activity in whole.

In early 2010 main development trends correspond to those of recent years.

In 2010-2012 there is expected further pork production growth by 7% per year in average or by 150 thousand deadweight tons every year and poultry production growth - by 8% per year in average or about 190-200 thousand deadweight tons every year. Accordingly to forecasts of Russian Poultry Union, in 2010 domestic poultry production will grow nearly by 300 thousand deadweight tons. Beef production will go on reducing as before and at the best manage to re¬main at the level of previous years.

The year 2009 is characterized by the growth of the average price set by the agricultural produc-ers. In general the price growth comprised 16.6% compared to 2008, while the consumer price index for foodstuff in the Russian Federation in 2009 was 6.1%. The most significant price growth was recorded for poultry.  

The prices at pork market in 2009 rode on market resources. The first half of 2009 saw price increase resulting from scarce supply of pigs for slaughter and high consumer's demand, par-ticularly during May-August period (so called "shashlik season"). In the second half of 2009 the prices became stabilize and began dropping owing to seasonal growth of supply of pigs for slaughter, starting operation of a number of new pig farms at full capacity, increase in import of live pigs for slaughter, low world prices and some fall in consumer's demand. 

In 2009 import of all kinds of meat grew down. The most significant reduction was recorded for poultry import - by 19% compared to 2008 to 985 thousand tons - and pork import - by 18% to 670 thousand tons. Beef import went down 14% and came to 750 thousand tons.

Regulations of the government of the Russian Federation № 1021 "On Import of Beef, Pork and Poultry Meat in 2006 to 2009" of December 16,2009 introduces tariff quotas for fresh or chilled cattle meat, commodity items 0201 and 0202 of Foreign Trade Commodity Nomenclature of the Russian Federation, fresh, chilled or frozen pork and trimming of commodity item 0203 of For-eign Trade Commodity Nomenclature of the Russian Federation and poultry meat, commodity item 0207 of Foreign Trade Commodity Nomenclature of the Russian Federation imported into the customs territory of the Russian Federation in 2010 - 2012.  

Rosstat reported that in 2009 meat and meat products consumption increased by 2% and amounted to 67 kg per capita.

Beef consumption kept on reducing in 2009. By provisional data it went down 4.4% to 17.5 kg per capita that was connected with beef resources reduction because of insufficient own produc¬tion volume and decrease in volume of import in 2009. As for pork, pork consumption remained at the level of 2008 due to significant growth of own production volume despite decrease in volume of import in 2009, which resulted to some growth of market resources.

By provisional data poultry consumption went up 1% compared to 2008 and comprised 24.3 kg per capita at the expense of significant growth of domestic poultry production and positioning it as cheaper meat compared to other kinds of meat production.

Recent years saw quite marked structural changes in meat consumption. People come to con-suming more poultry and less pork and beef. Taking into account the specificity of demand creation, conditions of forming meat resources in the market, people's income level there is expected in 2010-2012 further reduction in beef consumption and increase in poultry and pork consumption.

At the end of 2009 the government of the Russian Federation took a decision to rise customs duty rates for import of live animals for slaughtering from 5% to 40%, but not least than €0.5 per 1 kg and also for import of by-products from 15%, but not least than €0.15 per 1 kg, to 25%, but not least than €0.35 per 1 kg. The decision came into operation since January 1,2010. Specific attention should be drawn to the fact that according to experts from National Meat Association, data of Rosstat and other state structures about consumption, market capac¬ity, demand and supply balance needs more careful analyzing, because when calculating there were used no coefficients and necessary corrections for boneless meat and bone-in meat. So, beef import from far aboard involves only boneless meat whereas cattle meat production in the Russian Federation is accounted in deadweight tons. Simple summation of these indices is incorrect and leads to subsequent mistakes when calculating other data (balance, consumption and so on).

Wide use of innovations, deep raising of the production capacities allowed Miratorg Agribusi¬ness Holding once again to confirm the status of the largest Russian agribusiness holding and leading operator at the meat market.

* Source National Meat Association