The booming Russian economy resulted in sharp increases in meat imports in the first six months of 2008, in particular of pork and poultry meat. Import demand is helped by falling domestic supplies and, in August 2008, a further one percent reduction in the national cattle and pig herds was recorded to total 22.6 million head and 17.5 million head respectively.
Following a substantial increase in 2007, beef imports were relatively stable in 2008. Over 97 percent of Russian beef imports are frozen with Brazil holding 52 percent of the market. Owing to disease problems and reduced availability of supplies, Brazil has lost Russian market share to its South American neighbours Uruguay and Paraguay. Imports from Argentina have also declined due to its economic problems and subsequent export ban.
The availability of export refunds on pig meat meant that Russian pork imports from the EU in the first half of 2008 were more than double that recorded in the equivalent period of 2007. The lifting of the ban on Polish meat products in January led to Polish pork imports of almost 5,000 tonnes in the January to June period.
Following a dip in 2007, poultry imports in 2008 were back up to the level recorded in the first half of 2006. The weakness of the US dollar has encouraged increased imports from the US.
Russian production of poultry meat is expected to increase by over 16 percent to 2.2 million tonnes in 2008, but with consumption stable at 3.0 million tonnes, this will lead to a reduced requirement for imports. In an attempt to continue to protect domestic producers from increased imports, the Russian government has proposed a new method for calculating 2009 meat and poultry quotas, based on the average traded in the three years 2004-2007. This may led to a reduction in supplies outside of quota in the second half of 2008 as typically larger volumes were imported over this period to gain quota allocation for the following year.
At the same time, the Russian Agricultural Minister has indicated that the time had come to make a downward revision to quotas and imports. After 2009 Russia has the option of switching from quotas to customs duties which could increase the level of protection offered to domestic producers.