There has always been more than just economics involved in international meat trade. Governments have always been prone to interfere in the market, tipping supply and demand in bizarre and unpredictable ways. In August 2014, the Russian government banned meat imports into Russia from the U.S., EU and some other countries. This move was part of so-called “counter sanctions,” devised to punish the West for its stance over the Ukraine situation.

The sanctions and lower oil prices have undercut the value of the Russian ruble and made meat imports from other countries more problematic. In January 2015, Russia imported just 23.3 thousand tons of meat compared to 89.0 thousand and 113.1 thousand tons in January of 2014 and 2013, respectively. Russia’s position as the world’s most important and desirable export market for meat is gone. The road to Russian customers has always been long and winding but now something is fundamentally different.

Russia’s meat supply now exceeds demand, despite meager import volume. This has not been the case since the early 1990s. Pork carcasses and whole broilers are losing their value and only beef is appreciating. It is understandable, bearing in mind the rapid rise in production of pork and poultry in Russia in recent years. In 2014, industrial poultry and pork production grew 6.4 and 12.7 percent, respectively. The Russian Central Bank’s decision to raise its key rate is intended to thwart further growth of production, but at the moment, there is no reason to believe that already launched investment projects will be frozen immediately. It implies that Russian meat production is set to grow again in 2015, though at a somewhat slower pace and will compensate for missing import volumes to some extent.

On the other side of equation, demand is lax. Double-digit inflation is here to stay. And unlike in the previous crisis in 2009, there is a prospect of real income plunge for most Russians in coming months. Without a doubt meat is the last thing one would wish to economize on, but enough money is likely to be diverted to purchasing other essentials. This means that even though meat consumption may slip below the 71.0-kilogram (156.5-pound) level attained in 2014, the possibility of a hike in meat prices in the coming year remains low.


Relatively low prices and a devalued ruble mean that, “counter sanctions” or not, there will be little incentive to export meat to Russia. What it also means is that there is enough incentive for Russian meat producers to look overseas. And no matter what you may hear about the export of Russian meat, it is going to be a totally new factor for international trade.

Strictly speaking, there isn’t any meat export from Russia now. Some amount of meat – poultry, sausages and recently beef – is being moved to Kazakhstan. But, with this republic being part of the Eurasian Economical Union along with Russia, it is not even registered by Russian customs. Other exports of Russian producers are primarily chicken paws, which are considered edible only in Hong Kong and China. One product and essentially one market do not represent a stable sales channel. Export of paws dropped to 1.1 thousand tons this January from 2.2 thousand tons a year ago. Presence of African swine fever (ASF) makes shipment of Russian pork to major international markets problematic. Yet, in early March the price of whole broilers in Russia was US$1.45 (the average annual price in 2009 - 2014 was US$2.4) and moving down in the wholesale markets of the Moscow region. Exporters should note that the port of Novorossiysk Russia is much closer to Middle East and West Africa than Brazilian and U.S. ports.

Since the USSR’s collapse, the Russian market has been kind of a pendulum for producers around the world. No analyst really knew to whom Russia would turn for meat shipments next. But the pie was always there and there was a good reason to hope for a slice. Now the turning point has been reached. Russia is likely to emerge from the current economic crisis as a self-sufficient meat market. But self-sufficiency goes hand-in-hand with oversupply.  It is about to spill over everywhere from Astana to Monrovia. This is good news for Russia as the need for export diversification is becoming ever more pressing. For traditional meat exporters in the U.S., Brazil and EU it means that there will be less easy ways out of domestic markets in the coming decade.