Rising prices hit demand for pork in the Customs Union
Industry observers noted that several strong factors were pushing up prices, including the continuing African swine fever epidemic, recently implemented restrictions on European pork imports and live pigs from the US, and the introduction of technical regulations in the Customs Union on meat, which have significantly tightened the rules of pork production on small farms.
According to preliminary statistics, the volume of pork sales fell by 8% in Russia and by 14.5% in Belarus last week, as a significant portion of the population cannot afford to buy such expensive meat. At the same time, the statistical services pointed to some growth in demand for poultry, both in Russia and Belarus.
"Since the beginning of the year the wholesale prices for different pork products have risen by 1.6-2.2 times," said Sergey Yushin, head of the executive committee of the National Meat Association. According to the association, from January to April, the price of pork rose on average from RUB167 (US$4.80) per kg to RUB257 (US$7.40). On a year-to-year comparison the prices rose by 2.5 times, with the price of pork at around RUB100 (US$2.90) per kg at the end of spring 2013.
Yushin added that the price rises and recent pork import bans had resulted in a jump in the levels of pork smuggled from Ukraine, Poland and the Baltic States to Russia.
"Such a rapid rise in domestic prices for pork production prompted a surge in illegal activity. Tough veterinary demands for pork, which also make prices higher in Russia than in other countries, are providing an additional incentive for smugglers, who see an opportunity to reap the benefits," said Yushin.
Belarus is facing the same problems with pork prices, but on a larger scale, according to local analysts.
"Data from the National Statistics Committee of the Republic of Belarus show that, during May, pork prices in the country increased substantially. In particular, the price for bone-in pork jumped by 35%. So now the price of pork stands at BRR70,000 (US$6.83) per kg. But boneless pork, which is more expensive, rose by 27% to BRR101,000 (US$9.86) per kg," said Minsk-based agricultural expert Elena Klimenko.
Recent social research has revealed that 18% of Russian and 34% of Belarusian citizens now cannot afford to buy pork in the same amounts they did a two months ago. At the same time, the current rise in prices has forced 3% of Russian and 5% of Belarusian citizens to abandon buying pork completely.
The population’s low purchasing power is the main reason for the fall-off in demand. For instance in Russia, 13% of population has a monthly salary of less than US$259 per month, while the average level of salary in Belarus is US$420 per month.
