address the current issues, the purchase of these goods could indeed be subsidised”. Even the biggest companies are concerned about the rising costs. Russia’s largest poultry producer, Cherkizovo, told local press that the Russian population’s buying power had shrunk during the coronavirus-induced crisis. Even growing exports are failing to compensate for the rising cost of raw materials. The Russian government has pledged to introduce a grain ex- port quota to restrict the growth of prices on the domestic market in 2021. Grain market participants both inside and outside Russia are strongly critical of this policy. Some foreign officials claimed that grain export restrictions could doom certain countries to starvation. According to the RGU, export quotas only push up grain prices since, amid the rising uncer- tainty, clients are rushing to place orders to fill their grain stocks. The Russian Agricultural Ministry has not so far issued any information on whether Russian poultry farmers can apply for new subsidies.


Oversupply crisis Despite all of this, the Russian poultry industry continues to attract large investors. With new farms being built, Russian farmers are truly concerned that this could cause a fully- fledged oversupply crisis. The foundations for new farms had already been laid before the start of the coronavirus pan- demic and, even with rising costs, investors are committed to completing their projects. “With regard to new projects in the poultry industry, we are cautious about what the consequences will be of their entry into a market which has been saturated for several years now,” says Lakhtyukhov. “If we talk about broiler production, a couple of large pro- jects are underway. Broiler farm Ruskom, with a capacity of 40,000 tonnes per year in the Tyumen region and the Siberia Agro-Industrial Park, with a capacity of 70,000 tonnes, will put pressure on the market,” he continues. On top of that, the official sees farms that had closed in the past few years get- ting ready for a relaunch, including Eurodon and the Gafuri Poultry Complex. Instead of building new farms, Lakhtyukhov believes that in- vesting in own breeding stock production could be far more profitable. “It is necessary to focus on products that are in de- mand in export markets, on the one hand, while protecting ourselves from rising costs and disruptions in the supply of hatching eggs and breeding flock, on the other,” Lakhtyukhov adds. “The Russian genetic programme is on track: new local commercial breeds are being tested and have so far shown good results, but breeder flock multiplication and genetic im- provements will take 3 to 5 years to be able to meet at least a 15% demand from the domestic broiler industry for hatching eggs,” says Davleyev. “In the meantime, Russia is reducing its dependency on im- ports by allowing the leading foreign suppliers of genetic ma- terial to localise their GP flocks: Aviagen, Cobb, and Hendrix


Genetics are increasing their investments in breeding opera- tions for broilers, layers and turkeys to secure the supply of HE and DOC in the event of highly pathogenic avian influenza (HPAI) and Newcastle disease propagation,” states Davleyev.


AI risk to exports In 2020, Russia exported some 300,000 tonnes of poultry- meat, almost 100,000 tonnes more than in 2019. In the first half of 2020, Russia exported 147,600 tonnes of poultry – nearly twice as much as last year. The country has increased exports to China nearly sevenfold since the beginning of 2020, and now new markets, including Africa and Saudi Ara- bia, have started to offer good opportunities for Russian com- panies. However, the expanding AI epidemic could endanger Russian poultry exports. “AI is threatening the export programmes of major Russian poultry producers who are taking advantage of the more competitive export prices due to the weaker ruble,” says Davleyev. “The virus has already been registered in eight re- gions of Russia – from Western Siberia and Central Volga to the Black Sea area.” So far, it has not impacted Russia’s major poultry-exporting region but market players are concerned that this could happen. It is hard to predict whether or not Russian government agencies would be able to tackle AI. One thing is certain: in the current circumstances Russia cannot afford to be subjected to major export restrictions.


▶ POULTRY WORLD | No. 2, 2021 13


As the retail price of pork dropped sharp- ly, poultry demand slowed.


PHOTO: VLADISLAV VOROTNIKOV


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