Poultry is over 60% of the total meat consumption in the country and around 70% of the export supplies. The domestic consumption increases due to the general reduction in income of people who choose cheaper products. The demand for Russian meat, including poultry, increases in the Asia region and West Africa.
The consumption volume of meat and by-products by Russians in 2017 was 8.2 mln t, which is by 5% higher than in 2016. This growth was mostly due to the poultry industry. During the last few years, the demand for poultry is constantly increasing: due to the reduction in income and decrease in buying activity, consumers prefer cheaper meat instead of pork or beef. In 2017, poultry was around 60% of the total consumption volume. Last year also saw a decrease by 17.5% (from 117.3 rubles/kg in 2016 to 96.8 rubles/kg) in poultry prices, particularly chicken meat, mainly due to the overproduction and high market saturation.
Russian manufacturers supply around 89% of meat in the domestic market. During the last few years, there is a decrease in import volumes caused by import substitution processes in the industry due to the large investment project implementation (construction and commissioning of new facilities of the agricultural holding “Miratorg”, “Rusagro”, etc.).
Top 50 meat producers together provide over 70% of the production output in volume terms. The leading companies are “Cherkizovo” Corporate Group, “Prioskolie”, “Miratorg” and Agricultural Holding Company “BEZRK-Belgrankorm”.
Meat Export from the Russian Federation
The meat export supply dynamics in 2013–2017 showed a steady growth with the average annual rate of around +45%. In 2017, the meat export reached 239.8 ths t (+40% YoY) with the total amount of 318 mln USD. Poultry was around 68% of the meat and by-product supply, while pork was approximately 30%, and beef and other meat were 2%.
Russian products are exported mostly to CIS countries, Vietnam and Hong Kong. The product supplies to Asian countries mainly include meat by-products, such as chicken legs, pig trotters, cheeks, etc.).
In volume terms, the largest supply volume in 2017 was to Ukraine (69.1 ths t), Vietnam (51.4 ths t), Hong Kong (37.2 ths t), Kazakhstan (32.4 ths t), Kyrgyzstan (13.9 ths t) and Belarus (9.4 ths t). In value terms, the leading countries are Ukraine (98.8 mln USD), Hong Kong (59.9 mln USD) and Kazakhstan (44.9 mln USD).
Market Growth Forecast
In mid-term perspective, the meat consumption is expected to grow by 1—2% annually under the conditions of increasing income and the standard of living of the population. The most effective segments will continue to be the production of poultry (chicken, turkey and duck meat), pork and mutton.
Promising Export Markets
One of the most promising export supply destinations are the countries of the Asia region where meat consumption increases due to the population and income level growth. Approximately 60% of meat is supplied to China, while the highest consumption volume growth rates are seen in Myanmar (+8.9%), Indonesia (+5.0%) and Turkey (+5.9%). Pork is around 47% of the consumption, poultry – 31%, cattle meat – 14%.
The West Africa countries (Tunisia, Algeria, Morocco, Ghana, Benin, Mali, etc.) can also be called promising destinations for Russian product export. Despite the production volume growth, local producers can’t fully satisfy the market demand. The largest meat importers in this region are Benin, Ghana and Algeria (65% of the total supply). Guinea, Togo and Mauritania show the highest growth rates of meat import volumes. The most demanded types of meat in the region are poultry and cattle meat.
It is worth noting, however, that the export supply ramp-up of Russian meat and supply geography expansion are currently hindered due to the bad epizootic situation connected with livestock diseases, particularly a number of African swine fever (ASF) and avian influenza outbreaks in 2016 and 2017. For example, in January 2018, UAE imposed a ban on the import of meat from Kostroma Oblast, Astrakhan Oblast and Kalmykia because of the avian influenza outbreaks. On the other hand, in May 2017 Qatar decided to lift the ban on the import of poultry and poultry products. Earlier, in September 2017, Saudi Arabia lifted the ban on Russian meat supplies and renewed the import.
Despite the current temporary bans, the export supply volume supported by the demand of the consumers from near and far abroad is expected to grow in the mid-run by +1—2% annually, reaching 277 ths t by 2025.
Source: www.sfera.fm