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INTERVIEW ▶▶▶


And it mostly hurt those producers who had only recently started production and still had to pay interest and return investment loans to their banks. “In addition, many companies are vertically integrated which adds to their stability, though it is obvious that old pig farms and a lot of backyard production will go out of business. Our compa- nies are constantly trying to lower production costs and increase efficiency. The cost of production at modern facilities is around US$ 1.1–1.2/kg live weight. The price for grains and pig feed is not low, but it is stable, plus the expanding export opportunities offer room for profitability growth. “In general, things are complex, since so far we have not been able to reach out to foreign markets that can purchase decent volumes. In 2020, we expect new farms to be completed with a total capacity of around 300,000 tonnes. Some outdated farms with poor efficiency levels will close down. “In spite of the current price situation, the overall investment in the Russian pig industry is expected to be around 200 billion rou- bles (US$ 3.3 billion) by 2023. Taking into account the market conjuncture, some companies may decide to put some projects on hold.”


Are there any major changes with regard to the pig industry? “Starting from 2019, state-subsidised soft loans are no longer is- sued for the construction of new pig farms. This was a very good decision, because there is no need to create additional pressure on the market. It is important that the authorities refrain from tak- ing any steps that will negatively affect production costs, in par- ticular through an increase in prices for feed additives and veteri- nary drugs. “There is also uncertainty about new environmental requirements for Russian pig farms, specifically that treat them as being in the highest class of danger. This creates additional costs and we be- lieve it is unjustified. “And there is the question of measures the government is taking in regard to tackling ASF. A modern Russian pig farm with 2,750 to 5,000 sows has to spend up to 50 million roubles (US$ 800,000) protecting itself against ASF and maintaining additional biosecu- rity measures. With a more effective fight against the disease at the state level, this figure could be much lower.


What are the prospects of tackling ASF in Russia? “There are positive developments, as companies have taken seri- ous steps aimed at preventing new ASF outbreaks. Authorities throughout Russia have become more experienced in dealing with this issue, though the picture is far from ideal. Basically, just like Eastern Europe and South East Asia we are doomed to have sporadic ASF outbreaks in the coming years. “Yet, it is important to say that in the face of ASF, Russia not only managed to save its industrial pork production, but also to ex- pand it. We have established a regionalisation programme, which means we can guarantee ASF-free pork supply from the regions free of the virus. We have also implemented compartmentalisa-


24 ▶PIG PROGRESS | Volume 36, No. 4, 2020


tion, meaning that every company in the supply chain can receive its own biosecurity status defining how well it is protected against ASF, and this is given not only to pig farms, but also to processing units, warehouses, etc. “In addition, we have introduced a new state data system of elec- tronic traceability – Mercury – which makes the livestock and product supply chain fully transparent. This will enhance the ef- fectiveness of our fight against ASF and other diseases. “


What are the export prospects for the Russian pig industry? “A lot of hopes are focused on the Chinese market. This country consumes a lot of everything, including pork and pork offal, and given the geographic proximity, exports to China could be an im- portant factor to achieve comfortable pork prices in Russia. “The average pork price in China is 2.5 times higher than in Russia. Nevertheless, trade negotiations with China are complex. We spent six years getting access to the country’s poultry market, and there is no decision on pork access on the horizon. “As far as we know, the Chinese ministry of agriculture does not approve of the Russian regionalisation system, even though it ac- cepts a similar system in the EU and purchases large quantities of pork from Europe. I’m pretty sure that the government agencies of Russia and China could design a system ensuring supplies of safe pork, but so far this has not been happening. “Other promising markets are South Korea and Japan, but they also remain closed to Russian pork producers. We will concentrate on available markets in Africa, as well as Vietnam, Hong Kong, Sin- gapore, Venezuela and countries in the Commonwealth of Inde- pendent States (CIS – comprising the former Soviet Union). We are in talks with the Philippines and Indonesia. “When it comes to production costs, we have achieved great re- sults in cutting them. Today our cost of production at modern farms and slaughterhouses is similar to that of the effective Euro- pean or American producers. Our price for pork carcasses is lower than in most EU countries, and is not higher than in Brazil. Only Canada and US are offering cheaper products than Russia.”


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