Big losses for Russian poultry industry

By Vladislav Vorotnikov

- Last updated on GMT

Russia's poultry industry is suffering from low prices and high costs
Russia's poultry industry is suffering from low prices and high costs

Related tags Poultry industry Meat Wto Livestock Poultry

Russia’s biggest poultry production regions have reported multi-million-dollar losses in the first six months of 2013.

The region of Southern Urals, for example, which is consistently ranked the second-largest producer of poultry meat in the country, has reported a loss of RUB622m (US$21m) so far this year.

According to experts, this has occurred due to numerous factors and is unlikely to change in the short term.

Andrew Kosilov, CEO of one of the largest poultry farms in Ural, explained that both the pig and poultry industry have faced price cuts since the end of last year.

“Since Russia’s accession to the World Trade Organisation (WTO), import duties on pork for processing have been reduced by up to five or six times. Such a sharp fall in pork prices has also seriously affected the poultry industry, where prices have also dropped,”​ he said.

“On the other hand, the poultry industry has faced serious problems due to drought and rising feed prices.”

Evgeni Narukov, CEO of the Health Farm group of companies, said Russia’s federal and regional authorities were not fully aware of the situation in the poultry industry.

“By joining the WTO and not increasing supplies of foreign poultry to the Russian market, the government has opened the way for frozen blocks of cheap pork,”​ he explained.

“Thus meat processors, who would usually use up to 40% of chicken as raw materials for sausages, have abandoned it in favour of this cheap pork. As a result, the Russian poultry market has faced over-production of chicken.”

Narukov added that “accession to the WTO, lack of growth in consumption, lower chicken prices, inflated feed prices and lack of state support”​ were all factors that had contributed towards losses in the Russian poultry industry.

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