Russian meat industry faces uncertain long-term future
A recent report from the country’s Ministry of Economic Development revealed that Russian meat production is on track to reach around 8.6m tonnes (t) this year, up from 8.1mt in 2012, and could hit 9.2-9.6mt in 2016. Meat imports are expected to continue increasing to 2.3-2.6mt this year, compared to 2.5mt in 2012, but fall back to around 2.2-2.5mt by 2016.
However, the report added that after 2016, the industry is likely to enter a period of stagnation, with long-term forecasts unclear.
“The negative trends associated with epizootic risks, in particular the continuing spread of African swine fever and foot-and-mouth disease, as well as lack of facilities for slaughtering and meat processing, and excess of supply of certain types of meat, will eventually lead to decreasing profitability in the meat production industry,” said the report.
“In addition, we are forecasting a rise in the total debt burden of meat production in Russia, which will be reflected in a lower index of investment activity in coming years,” say Ministry experts.
According to the experts, pig farming will continue to grow in 2014-2015, because there are a large number of projects still under construction in the country. “However, since Russia entered into the World Trade Organization, the volume of announced investment in the construction of the new pig farms has dropped significantly, so after 2016 there will not be any new capacity enabling the country to further increase pork production,” added the report.
Experts forecast that the production of pigs for slaughter in live weight in 2016 will grow by 15.4% in comparison with 2012 and poultry will rise by 27.5%. The production of cattle for slaughter in 2016 will grow by 4.5%. However, according to experts, the development of all of these sectors will slow considerably in the long-term.
