The forecast from USDA’s Foreign Agricultural Service (FAS) for Russian broiler imports for 2014 remains at 530,000 metric tons, which is unchanged from FAS’ revised 2013 estimate, according to the agency’s Global Agricultureal Information Network (GAIN) report from Moscow. Imports from non common wealth of independent states (CIS) countries are controlled by a Tariff Rate Quota, the volumes for which remain unchanged in 2014. Also, imports from CIS countries are not expected to see dramatic shifts. One factor that could impact this forecast, however, is that, if the Russian ruble further weakens over the course of 2014, it could result in increased market opportunities for domestically produced poultry at the expense of imports, the report said.
The broiler import estimate for 2013 was reduced by 10,000 to 530,000 tons as a result of final Russian Customs data and Customs Union statistics. The United States remained the largest supplier, followed by Belarus, Brazil, and Ukraine. Imports from Ukraine showed the strongest growth of any major supplier, rising 30 percent to nearly 40,000 tons in 2013.
Broiler consumption in 2014 is forecast for Russia to decline by 5 percent to 3,590,000 tons (from the previous forecast of 3,765,000 tons). This decrease is primarily the result of a lower production forecast and an expectation that imports will remain flat. Population growth in Russia is minimal and there does not seem to be any significant shifting between meat protein sources. Prices for beef and pork, although considerably higher, have remained largely steady vis-à-vis poultry prices.
Farm gate chicken prices decreased from 81.8 rubles per kilogram (U.S. $1.21 per pound) in December 2012 to 70.5 rubles (U.S. $0.97 per pound) in December 2013, with nearly this entire decline occurring in January and February 2013 as a result of the seasonal spike in production at the end of year.
FAS Moscow reduced its 2014 broiler production forecast for Russia to 3,000,000 tons (compared with its previous forecast of 3,300,000 tons). If realized, this level of production would be 3 percent above the 2013 production levels. However, this growth rate is a slowdown when compared with the over 6 percent growth rate that occurred during 2012 and which would be the slowest annual growth rate since 1999.
FAS explained the slower rate of increase in production is due to reduced poultry inventory numbers. Near market saturation (domestic production is estimated to supply over 85 percent of domestic consumption). Reduced areas for productivity growth (shift of production from private household and small-scale operations to more modern agricultural enterprises with modern facilities and greatly improved efficiency), high indebtedness, and low profitability. FAS noted that the combination of high feed prices during much of 2013, combined with continued low poultry prices (as a result of abundant supplies), sharply impacted profitability of poultry establishments and also increased their indebtedness. FAS also reported that delayed government support payments exacerbated this situation. According to the Russian government estimation, the combination of all these factors decreased poultry production profitability to 3.5 percent in 2013 (compared to 17.2 percent in 2012), which has decreased the investment attractiveness of this sector. It is also estimated that the percentage of unprofitable establishments increased to 44 percent in 2013, compared with 22 percent in 2012.
The complete report is available here.
