There are too many pigs in Russia
Russia hog breeders are threatened by ruin: they already meet 92% of Russia citizens demands in meat; constructing capacities will add surplus of 20% per year, while demand growth is 6% only. Exports could save the situation, but they rank below of 2% of the overall pork production in Russia.
In 2017 Russia produced 4.57 million ton of pork and this is 5% growth against 2016. In 2018 there is expected increase by 200 thousand ton. By the year of 2021 Russia will be built and modernized processing capacities for additional 1 million ton per year. Pork overstock and connected with it loss of values has already led to the exit from the market of small producers and private subsidiary farms, and in the long terms pork surplus threatens with bankruptcy to large producers, experts say. Export could improve situation, but its share is just 1.5% of overall pork production due to the African Swine Fever disease.
All hopes connected to China: over the first six months of 2018 Russia ramped pork exports up (+41%). In absolute figures dynamic is not so impactful: pork exports were only 46 thousand tons, and by the year end pork exports will be up to 80-85 thousand ton, according to the NUPP director Kovalev. This is 1.8% of the overall pork production in 2018 that should achieve 4.77 million ton.
The major consumers of Russia pork are Asian countries (China, Japan, South Korea) that are importing 52% of Russia overall pork exports. Demand in these markets continues to grow: in China demand on pork meat will be up by 65%, experts say. Russia is going to gain pork export to 270-300 thousand ton per year by the year of 2024 unless the ASF is halted to spread. About half pf Russia territories is recognized ill-behaved from the epizootic point of view due-to the ASF.
Besides China has traditional partners-pork exporters from North America and the EU, and no needs for China to compensate growing demand in pork meat for the account of Russia pork, says Ilya Bereznyuk, the managing partner at Agro & Food Communication.