Principle theme

18 August 2010

Green Light to American poultry imports

Starting from August 16th Russia lifted the ban on imports of US poultry. The ban was imposed on January 1st this year. What led to the ban was the introduction of a new set of technical poultry import regulations in Russia, unqualifying US poultry meat disinfection procedures. Right after the ban was in place, both countries had a series of not-so-easy negotiations. Russia had also talked about poultry imports from a number of other countries, and tried to stimulate local production. People from Russia’s sanitary watchdogs met their US colleagues several times, advertising 12 different meat processing technologies based on tougher norms of chlorine content in solutions Americans used for disinfection. All the differences were done away with only after the meeting of Russian President Medvedev with his US counterpart last June. Until now the Russian farmers enjoyed a break for several months, but given that the embargo has been lifted they begin to be wary. The recent heat wave fouled sales of poultry along with other foodstuffs, and dumping prices of US produce may seriously hit their market share, because “Bush chicken legs” were about 30% cheaper than Russian chicken meat. Last year, for example, US farmers imported poultry to Russia to the tune of more than 740 million dollars.  Indeed, the resumption of imports may dramatically tell on the Russian market, argues Natalia Nikulina, an independent foodstuffs market expert.  “Prices of US poultry had long formed the low-end segment of the Russian poultry market before the embargo. Their re-emergence on the market here would naturally enhance competition, possible preventing prices from growing, all the more so since the growth of foodstuffs prices is becoming more and more evident this summer,” said Natalia Nikulina.  So far only 8 out of the above mentioned 68 US companies have been authorized to do the slaughtering and processing to qualify the Russian norms. The rest are entitled to only store meat. But the list can be extended after consultations with the companies on the terms of their inclusion on the list. And they all can begin supplying their produce immediately.  According to Evgeny Kogan, Chairman of the Board of Food Trade Group, one of Russia’s major foodstuffs importer, last year US poultry imports amounted to 79% of all such imports having 22% of the Russian market. It is highly unlikely to have more than the 10 to 15% share this year. And it can help keep the prices at the level of 65 to 75 roubles (about US$ 2,5) a kilo instead of 85 roubles (a little less than 3 dollars) or so at present. The sooner imports begin, some analysts argue, the better for the Russian producers, lest they provoke a price fall next winter.

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