Pork prices in Russia fall by 20%
Since August 2012 the purchase prices for commercial pigs in Russia on average decreased from RUB 97 (US$ 3.15) to RUB 78 (US$ 2.53) per 1 kg, while in the Central Federal District it decreased to RUB 70 (US$ 2.27) per 1 kg .
This was reported recently by the National Meat Association. The last time such a sharp decline was recorded was in 2006, but since that time the prices for pigs and pork in the Russian market was steadily growing.
Market participants believe that the decline in pork prices is partly due to Russia’s accession to the WTO in August of this year and following the reduction of custom duties for producers from Canada and Brazil, which are the main foreign suppliers of pork to Russia.
In August on the domestic market imports were about 60,000 tonnes of pork, then in October the volume of import increased to 70,000 tonnes and continue to rise in November and December despite the recent trade disagreements with some countries concerning ractopamine. Another factor for the price drop experts say is the significant increase of pork production in the Belgorod region – which as of October was about 27% of Russia’s total industrial pork production.
At the same time pork farmers claim that their situation in the market is fraught with unfortunate consequences – the price drops amid poor harvest of grain (the basis for animal feed), and the tough competition with foreign companies. According to the Alexander Nikitin, vice-president of Miratorg – the largest pork producer in Russia – Russian pig farmers are forced to sell pork at the lowest price, so not to lose market and to be able to compete with foreign producers.
