Russia proposes endless ban on US, EU meat imports

06-Sep-2015 - Last updated on 07-Sep-2015 at 11:16 GMT

Russia looks set not to renew meat imports from the EU and US

Russia plans to exclude the US and EU from countries supplying its meat, following a draft decree published on the website of the country’s Ministry of Economic Development.

Russian experts claim this will mean a permanent ban on meat imports from these countries.

Countries export meat into Russia on the basis of a quota system. The draft resolution proposes to maintain quotas on meat imports next year at the level of 2015.

The quota for fresh or chilled beef so far is 40,000 tonnes (t), including 29,000t from the EU. The quota for frozen beef is 530,000t, including 60,000t for the EU and US. The upper limit for pork is 400,000t, for pork trimmings, 30,000t of which comes from the EU and US. Russia imports 364,000t of poultry meat, including 100,000t of frozen poultry. Out of that, 80,000t comes from the EU.

"Within five days after the possible abolition of the special measures for the supply of meat products from the US and the EU [food embargo], their quota will be proportionally distributed among other participants of foreign trade turnover," the report says.

"It is obvious that Russia is not going to renew the import of meat from the US and the EU, as it may radically change the situation on the national [meat] market, and would jeopardize the profitability of a number of projects laid down after the introduction of the embargo," said Russian agricultural analyst Eugene Gerden.

Import becomes senseless

Representatives of the Russian National Meat Association (NMA) believe the decision is mainly symbolic, as Russia may completely stop importing meat products in 2016.

"We expect that imports of meat may almost completely stop, because [low] domestic prices and reduced purchasing power [of population] make it economically senseless," stated NMA’s CEO Sergey Yushin. "At the same time we expect the increase in domestic production [in 2015-2016] would not be enough to cover the total drop in imports."

After the introduction of the embargo, meat prices in Russia jumped nearly 35%. At the same time, the Ruble has collapsed nearly twice against hard currencies, cutting suppliers' profit margins. However, according to Sergey Yushin, prices will not rise further.

“Prices will not rise, because a lack of products in the market will offset decline in demand," Yushin added. "Consumption of meat in the country falls even with the current prices. There would no be any increase on poultry, because of very tough competition in this segment. As for pork here the growth of production will constrain the growth of prices even after the full stop of import."

The NMA forecast that this year meat consumption in Russia would drop by nearly 6% compared to 2014, when it also decreased by 2.5%.