Russian pork producers are leveraging the ongoing trade tensions between the European Union and China to strengthen their position in global markets, particularly in China, the world’s largest pork consumer. As a new player in the $3.5 billion Chinese import market, Russia is setting ambitious goals despite the challenges posed by established competitors and changing market dynamics.
In February, Beijing authorized three Russian producers to export pork to China, marking the first significant entry of Russian pork into the Chinese market. The market is currently dominated by EU producers, who hold a 51% share, but the EU-China trade tensions are opening up new opportunities for Russia. The recent imposition of provisional duties by the EU on Chinese electric cars and China’s subsequent anti-dumping probe into EU pork firms have intensified these tensions.
"For us, these trade tensions represent a chance to showcase our competitiveness in the Chinese market," said Yuri Kovalyov, head of Russia's National Union of Pig Breeders. Kovalyov emphasized that Russian producers are not intentionally exploiting the situation but see it as an opportunity to establish a foothold in the Chinese market, with a goal to supply 10% of China’s pork imports within three to four years.
Despite the competitive landscape, including major exporters like Brazil and increasing domestic production in China, Russian producers are optimistic. Russian pork production is expected to grow to 5.2 million metric tons in 2024, making Russia the fourth-largest pork producer globally, on par with Brazil. Kovalyov projected that Russia could export 50,000-60,000 tons of pork to China this year, accounting for about 3% of China's total pork imports, as estimated by the U.S. Department of Agriculture.
The Russian pork industry has undergone significant transformation since its collapse after the fall of the Soviet Union. State support and protectionist measures have helped revive the industry, with up to $25 billion invested since 2005. Recent developments, including the lifting of a 15-year ban on EU pork imports to Russia in 2014 and the recovery from an African swine fever outbreak in 2008, have further boosted production.
The authorized Russian producers, including Miratorg, Velikoluksky Pig Breeding Complex, and Rusagro, are leading the charge in the Chinese market. "We cautiously estimate that we will export 10,000 tons to China this year," said Alexander Tarasov, deputy CEO of Rusagro. The industry is focusing on quality and efficiency, with Russian pork exports consisting of 60% meat and 40% offal, a mix similar to China's import preferences.
Looking ahead, Russian producers are exploring expansion opportunities in other markets as well, with a 50% share already secured in Vietnam and exports reaching around 20 other countries. However, potential delays in payments between Russia and China due to Western sanctions on Russian banks could present challenges. Banking sources have hinted at the possibility of experimenting with barter trade schemes, although Kovalyov noted that he was not aware of any such deals.
As Russian producers continue to navigate these challenges and opportunities, they remain confident in their ability to grow and compete on the global stage. "As newcomers, we have one of the most modern pork production sectors in the world," Kovalyov stated, underscoring Russia's potential to significantly increase its pork production and export capabilities.
(Source:www.reuters.com)
In February, Beijing authorized three Russian producers to export pork to China, marking the first significant entry of Russian pork into the Chinese market. The market is currently dominated by EU producers, who hold a 51% share, but the EU-China trade tensions are opening up new opportunities for Russia. The recent imposition of provisional duties by the EU on Chinese electric cars and China’s subsequent anti-dumping probe into EU pork firms have intensified these tensions.
"For us, these trade tensions represent a chance to showcase our competitiveness in the Chinese market," said Yuri Kovalyov, head of Russia's National Union of Pig Breeders. Kovalyov emphasized that Russian producers are not intentionally exploiting the situation but see it as an opportunity to establish a foothold in the Chinese market, with a goal to supply 10% of China’s pork imports within three to four years.
Despite the competitive landscape, including major exporters like Brazil and increasing domestic production in China, Russian producers are optimistic. Russian pork production is expected to grow to 5.2 million metric tons in 2024, making Russia the fourth-largest pork producer globally, on par with Brazil. Kovalyov projected that Russia could export 50,000-60,000 tons of pork to China this year, accounting for about 3% of China's total pork imports, as estimated by the U.S. Department of Agriculture.
The Russian pork industry has undergone significant transformation since its collapse after the fall of the Soviet Union. State support and protectionist measures have helped revive the industry, with up to $25 billion invested since 2005. Recent developments, including the lifting of a 15-year ban on EU pork imports to Russia in 2014 and the recovery from an African swine fever outbreak in 2008, have further boosted production.
The authorized Russian producers, including Miratorg, Velikoluksky Pig Breeding Complex, and Rusagro, are leading the charge in the Chinese market. "We cautiously estimate that we will export 10,000 tons to China this year," said Alexander Tarasov, deputy CEO of Rusagro. The industry is focusing on quality and efficiency, with Russian pork exports consisting of 60% meat and 40% offal, a mix similar to China's import preferences.
Looking ahead, Russian producers are exploring expansion opportunities in other markets as well, with a 50% share already secured in Vietnam and exports reaching around 20 other countries. However, potential delays in payments between Russia and China due to Western sanctions on Russian banks could present challenges. Banking sources have hinted at the possibility of experimenting with barter trade schemes, although Kovalyov noted that he was not aware of any such deals.
As Russian producers continue to navigate these challenges and opportunities, they remain confident in their ability to grow and compete on the global stage. "As newcomers, we have one of the most modern pork production sectors in the world," Kovalyov stated, underscoring Russia's potential to significantly increase its pork production and export capabilities.
(Source:www.reuters.com)
