Russian beef export grows by more than 200%

The decline in domestic consumption of beef and the rise in prices for it in the world, primarily in China, led to a rise in the export of Russian producers. According to the results of the first half of the year, supplies may grow by 223%, to 21.26 thousand tons, which is significantly higher than the dynamics for other types of meat. Pork and poultry producers cannot increase their supplies due to the saturation of foreign markets.

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According to the results of the first half of the year, beef exports from the Russian Federation may grow by 223%, to 21.26 thousand tons, the National Union of Pig Breeders predicts. According to the Ministry of Agriculture, from January 1 to May 23, 2021, 16.8 thousand tons of beef were sent abroad for $ 55.2 million, which is 5.6 times more in physical and 4.2 times in monetary terms than for the same period 2020.

China is the main buyer

The share of beef export to China totals 60%. The head of the National Meat Association notes that high export growth rates are primarily due to the low base effect, but Russian beef is indeed in demand and competitive in price, primarily in China. After the outbreaks of African swine fever (ASF) in China in 2019-2020, pork has risen in price and a change in preferences towards beef has begun from there. Now Chinese beef importers are looking for new suppliers. China suspended purchases of Australian beef. As a result, Russian suppliers have switched to regular shipments to China. The export of beef makes it possible to obtain more stable foreign exchange earnings. In Russia, the consumption of beef in 2020 fell to 1.94 million tons, which is the lowest for the last ten years.

Beef exports grows more than other types of meat

According to the National Union of Pig Breeders, pork exports in the first half of the year may grow by 16%, to 102.3 thousand tons, while supplies of poultry and mutton, on the contrary, will decrease by 20% and 93%, to 116.6 thousand and 400 tons, respectively. In 2020, due to the opening of Vietnam, pork exports increased by 96% and it is difficult to further increase supplies. The Russian Federation, along with Brazil, already occupies 25% of Vietnamese pork imports, and China will not open quickly for Russian producers, even a single outbreak of ASF gives the PRC a reason to close supplies from the entire country, he explains.

According to Albert Davleev, President of Agrifood Strategies, China and Vietnam, the market drivers for the growth of poultry exports, are now saturated. For the CIS, Russian poultry is uncompetitive in price, given the increase in cost in the first half of the year due to a decrease in production and an increase in production costs. According to the expert, the export could be supported by the opening of new markets for poultry meat, primarily in African countries.

Demand for beef is growing

In a number of countries, there has been a tendency to reduce the number of cattle, primarily under pressure from environmental activists and politicians, but the demand for beef is still growing. Within 30 years, the consumption of this meat may increase by 30% and Russian producers are able to occupy this niche. But for this it is necessary to continue to stimulate investments in the industry. The Ministry of Agriculture notes that they are guided by the satisfaction of domestic needs, although the growth of meat production allows increasing exports.  Russian manufacturers are compensated for part of the costs of certification of products for deliveries abroad. According to forecasts of the Ministry of Agriculture, by the end of 2021, the export of all meat will exceed $ 100 million, primarily due to an increase in supplies to China, Saudi Arabia, Uzbekistan, as well as the start of shipments to Morocco.

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Source: Kommersant