Inside Pigs
Russia scraps boycott on stage pork
Russia recently lifted the import ban on Brazilian pork, which came into effect at the end of 2017. Was this decision born of necessity, or is it symbolic politics?
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Russia launched one at the end of 2017 import stop on Brazilian pork. Officially because of the discovery of the banned growth substance ractopamine, but that reason was strongly doubted at the time. It was then suggested in the corridors that the cheap Brazilian import was the Russian pork price would print.
The boycott left the Brazilian pig sector with a large supply, because almost half of its exports (453.000 tons in 2017) depended on Russia. In turn, Russia imported 90% of the total pork imports (375.000 tons) from Brazil that year.
China as an alternative
The Brazilians found their way into other markets remarkably quickly; so did exports to China in the first 3 quarters of 2018 by 231% to 118.000 tons. This makes Brazil the most important supplier of pork in China, after the European Union and the United States.
The percentage increase also recorded double digits in other sales markets, such as Hong Kong and Singapore. Nevertheless, the loss of the Russian sales market was a loss, because on balance Brazilian pork exports lost 12,5% to 397.000 tons.
The loss of the Russian sales market is not permanent, because the Russian food watchdog (Rosselkhoznadzor) announced at the beginning of November that the boycott has been lifted. The service relies on guarantees regarding compliance with the rules, which have been promised from Brazil. This does not apply to all slaughterhouses; For example, the Russian market is still closed to well-known meat concerns such as JBS and BFR.
Russia is now a net exporter
The import ban also affected Russian pork imports in 2018, which plummeted by 45% to 200.000 tonnes. However, domestic production can easily absorb the lost imports. The country has been self-sufficient in pork on paper since 2016 and next year the country is heading for an overproduction of 268.000 tons. This means that Russia has quickly become a net exporter.
Despite the end of the boycott, the Russian sales market is no longer what it once was (for the Brazilian sector). The result is that they will probably continue to focus on other (Asian) markets. This means that European pork exporters will also have to fear competition from a Brazilian price fighter in the coming years.