Poland reports losses due to ban on pork exports to Russia

18-Feb-2014 - Last updated on 18-Feb-2014 at 10:57 GMT

Poland reports losses due to Russian ban

Poland’s meat industry has reported huge losses because of Russia’s recent restrictions on pork imports from the EU, following the recent outbreak of African swine fever (ASF) in Lithuania. Last week, Polskie Mieso – the Polish Association of Meat Producers, Exporters and Importers – sent an open letter to Prime Minister Donald Tusk with a request to address the situation urgently.

The letter said Polish meat producers had already suffered heavy losses and the situation was continuing to get worse. In 2013, pork exports from the country to Russia and Belarus amounted to 85,000t, with a total value of PLZ800m (US$264m).

As previously reported, following the discovery of an ASF outbreak in Lithuania, Russia suspended pork imports from the whole EU territory, as of late January.

Some Polish meat producers have already begun to cut back operations. According to estimates from Polish experts, local producers could lose about US$22m per month as a result of the ban. And the losses could even be higher, they say, as Poland has no large alternative markets to which it can export pork, and the restrictions may result in oversupply on the domestic market and a subsequent drop in prices.

Meat producers are asking the Polish government to intensify negotiations to force Russia to lift the ban.

Fall in prices

“The ban on EU pork imports to the countries of the Customs Union has caused a 15-20% drop in prices for pork in Poland,” said Witold Choinski, chairman of Polskie Mieso.

“How the situation will develop further, depends on what steps the European Commission takes. We hope Brussels uses all the tools at its disposal. We are talking about subsidising the production and exports to the third countries,” he said.

According to Choinski, Poland rapidly increased its pork exports, primarily to the Customs Union, in 2013. In 2012 Poland’s pork exports totalled 316,000t, but in 2013, according to preliminary estimates, they reached 550,000t. Faced with falling prices, manufacturers have started to look at increasing supplies to China, Japan and South Korea as much as possible.

However, it will be hard to reach this goal, and it will definitely take some time. In the meantime, producers fear the drop in prices will bring disaster to Poland’s pork industry.

In addition, Choinski said that despite the fact that most investment projects in Polish meat production were implemented after the country’s entry into the EU, some entrepreneurs had started to expand production with an eye on the markets of Russia and Belarus.

“These projects will be frozen pending clarification of the situation,” said Choinski.