Russian pork consumption to fall two percent

14-07-2009 | |

Amid the financial crisis, the growth rate of the pork production in Russia may slow down to 4.5%, while the consumption may decline 2%, according to forecasts of some leading Russian experts.

One of the key strategic objectives of the development of the pork market as well as the poultry market is the import substitution. At the moment the market share of the imported pork is 20%. By the year 2012, the domestic pork production must entirely substitute the import.

In 2008, a substantial, almost 30% growth, in the pig production prices was observed. It was related to the growth of the production cost as a result of the increase in the feed prices.

The dynamics of the production output in the period of 2003-2008 has been unstable. Due to the reduction of pig livestock, poor quality of stock breeding, and gaps in the investment flow, the production growth in the sector alternated with a reduction.

However, before 2005 the pork production had showed a positive growth as a result of the quota systems introduced in 2003, which enabled an increase of the domestic prices and production profitability growth.

Despite the big investments in pig production, after 2005 the industry did not show high results as, for example, with the poultry sector. One of the reasons is a longer production period of pig farms – between 2 – 2.5 years.

Currently, key Russian pork producers are agricultural companies such as Prodo, Agro-Belogorje, and APH Miratorg, which have pig production as their key line of business. Together they hold 16% of the market on the live weight basis (according to the year-end of 2008).