Russia signs meat deal with Iran
Meanwhile, Iranian companies may be granted the rights to duty-free exports of chicken meat to the Eurasia Economic Union of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan, according to a recent trade agreement between the government agencies of the two countries.
“The Iranian Veterinary Organization will grant the right to supply the Iranian market with beef, poultry meat and by-products from two Russian companies, Bryansk Broiler and Bryansk Meat Company, following completion of the final stage of veterinary evaluations,” said Sergei Dankvert, head of the Russian veterinary body Rosselkhoznadzor, in a statement. He specified that this should take place following a final inspection on 18 January 2016.
In exchange, Russia has promised to reduce or even abandon import duties on certain types of meat products for Iranian companies.
Unreasonable
“We are offering serious steps to improve the terms of trade for Iranian businesses, meaning a drop in and, in some cases, even the abolition of customs tariffs, especially for agricultural products,” said Alexei Ulyukayev, Russia’s Minister for Economic Development.
Earlier, Iranian officials had said the country would be able to supply Russia with 10,000 tonnes (t) of chicken meat per month, or 120,000t of meat annually. At the same time, despite the approval of exports in May 2015 for six Iranian companies, actual deliveries have not been initiated, as at the current rates of customs duties and prices on the Russian market are considered unreasonable.
Russia’s current demand for poultry imports is estimated at 200,000t per year, but it is believed that Iranian companies could take over a niche sector of the domestic market, given the Russian government’s food embargo against Ukraine and the suspension of agricultural trade with Turkey.
At the same time, trade profitability could be achieved by both countries approving the use of national currencies in bilateral trade.
'Exchange risks'
“The Russian Agency for Export Credit Insurance and Investment (EXIAR) and its Iranian partners have agreed mutual guarantees for transactions in national currencies,” said EXIAR CEO Alexey Tyupanov. “This covers export and investment transactions against commercial and political risks. We have agreed to exchange risks; if we have projects in Iran, then we can guarantee them and vice versa. We will start using this scheme from next year, starting from small amounts of US$10m-US$20m.”
In addition, according to representatives from Rosselkhoznadzor, the two parties are currently negotiating a package of measures to guarantee the transit of meat supplies to third countries. Iran has already confirmed that Russian products of animal origin are allowed transit through Iranian territory to third countries, provided that they are accompanied by veterinary certificates from Rosselkhoznadzor. At the same time, Russia has promised to provide the same benefits for Iranian products at the start of 2016.
