Russia signs meat deal with Uruguay
The deal comes after three years of negotiations and is expected to significantly boost Uruguayan export of beef to Russia.
“We had quota for the supply of 3,000 tonnes of meat to Russia at the fee of 15%,” explained Tabare Aguerre. “Anything above this quota has been subject of a 50% fee. Now, when we have sorted out all the issues with the certified quality of meat, this figure is reduced to 15%.”
Sergei Levin added that Uruguay has important climatic advantages in the production of a number of livestock products. At the same time, he added that in terms of meat, Russia is mostly interested in importing Uruguayan beef.
“Russia and Uruguay now have great potential for the expansion of the turnover, in particular in terms of import of dairy production, beef and by-products to Russia,” he said.
FMD vaccination issue
The deal has been welcomed by most Russian officials. In particular, Russian veterinary body Rosselhoznadzor pointed out the high quality of Uruguay beef, stating that Russian veterinary specialists are satisfied with the level of veterinary control in the country. However, the press-service of Rosselhoznadzor said that the export potential of the country was constrained by the continuing foot-and-mouth disease (FMD) vaccination.
“As Russia currently is in active dialogue with the Office International des Epizooties for obtaining FMD-free status for a country with zonal vaccination, exports to Russia of vaccinated cattle is impossible,” said the press-service.
The issue of FMD vaccination could significantly constrain the export potential of Uruguay’s beef industry to Russia, but according to a recent report from the Agricultural Ministry, Russia currently imports 80-90% of its breeding cattle, so Uruguay could benefit in this area.
Doubts on the actual prospects
Not all Russian experts agree that Uruguay has real prospects of boosting exports. According to the data from the National Meat Institute of Uruguay, in the second half of 2015 falls in the volume of exports to Russia doubled, despite the fact that prices fell by US$0.30. This trend has been connected primarily with the devaluation of the Russian currency.
“In fact, Uruguay has no ability to significantly increase the volume of beef production, so the actual rise of the deliveries to Russia can take place only with the redirecting of shipments from other sales markets,” commented Russian agricultural analyst Eugene Gerden.
“[Increased beef exports are] possible only with the more attractive price, while Russia’s weak national currency today has one of the lowest prices for beef. So despite the claims of officials, the supply of frozen beef would not be very attractive to Uruguayan businesses.”
