Russia restricts meat imports from Brazil and Paraguay
The restrictions have been implemented against a background of low levels of supply, with official data suggesting that forecasts from the middle of 2014 probably overestimated the potential of these countries becoming large suppliers of meat to Russia.
An official report from Rosselkhoznadzor stated that imports of products from Brazilian companies Lopesco Industria de Subprodutos Animais and Frig Industrial had been banned.
"The audit revealed that they do not have their own slaughterhouses and they use raw materials obtained from the entire territory of Brazil. It turned out that, among the suppliers of raw materials, there were companies that do not have the right to export their products to Russia, while one of the companies uses raw materials from China, Germany and other countries," said the report.
"In addition, it was found that Lopesco Industria de Subprodutos Animais sends raw materials to a Paraguayan company, which, in 2014, significantly increased its supply of raw casings to Russia. The supply of meat products from this company has also been temporarily suspended," added the report.
The overall prospects for meat exports to Russia from these countries remains unclear. On the one hand, a recent report by the World Bank on the Russian economy said that Brazil, Paraguay and Belarus were the countries that had benefited the most from the food embargo imposed by the Russian government in August 2014. It noted that these countries were able to increase supplies to the Russian market, replacing food products from the European Union, with Brazil benefiting most in terms of the meat trade.
However, data from the Federal Customs Service (FCS) indicated that there were issues with imports of meat products from both Brazil and Paraguay – in particular, supplies of beef from Brazil to Russia in January-February 2015 decreased by 56%, dropping to their lowest levels since 2005.
Despite favourable forecasts in the middle of last year, Paraguay was not able to establish a sufficient supply of any single type of meat to Russia and its supply volume to the market remains minimal. The main problem faced by importers was the devaluation of the Russian ruble against hard currencies at the end of 2014.
As a result, imports of chilled and frozen meat to Russia in January-February 2015 decreased by 55.6% year-on-year to 53,500 tonnes, according to FCS data.
Russian Minister of Agriculture Nikolai Fyodorov has commented that the current situation may allow Russia to significantly cut meat imports in 2015. He said: "Our doctrine on food safety requires self-sufficiency of 85% [for meat]. At the end of 2014, we approached 83% and, in 2016, this figure will be significantly higher, so the country is preparing to become a meat exporter."
