COUNTRY FOCUS ▶▶▶
The economic crisis is currently eroding the Russian popula- tion’s purchas- ing power and threatening to curb protein consumption.
the Sverdlovsk-based Irbit poultry farm added that prices were soaring, as producers needed to find alternative sources of packaging and labels which, given the sanctions and the growth in the exchange rate, may not remain in Russia in the near future. “If we have defective feed or inadequate veteri- nary care for the livestock, this will hurt productivity and per- formance which will lead to an increase in costs and a jump in prices,” Yushin added. Further to these developments, the Russian government has warned producers to curb price rises for basic foodstuffs, in- cluding poultry. A sharp increase in prices is likely to under- mine Russian shoppers’ purchasing power but if the price is constrained artificially, it could make poultry farmers loss-making. “Populists shout that the rise in prices for poultry products should be limited. But every factory director who sells his products for less than the production cost is subject to criminal liability,” Fisinin warned.
Exports on relative safe ground Since the beginning of the Ukraine crisis, Russian goods have been losing ground on foreign markets as Western groceries dumped Russian vodka, caviar and a broad range of other products. However, the boycott is not likely to hit Russian poultry exports, as Russian broiler meat primarily lands in the markets of countries deemed as friendly. In 2021, poultry meat was exported to 50 countries worldwide, but 80% of its exports go to five countries: China, Saudi Arabia, Kazakhstan, the separatist regions of Ukraine and Vietnam, said Savkina. “These countries, as far as I know, did not impose sanctions on us and did not refuse to cooperate. The volume of exports, of course, may have decreased temporarily. We will know that later after the reporting of the federal customs service but there should not be a significant impact on the overall annual result,” said Savkina. “It is likely that exports may be affected by difficulties with the transport of goods and rising prices both for the meat it- self and for fuel. Because of this, the volume of Russian meat bought by consumers may be less,” Savkina added. “Exports this year are still at a good level, although even here we con- stantly have to overcome new barriers – logistics, payment, long periods of checks by banks. In terms of price, Russian products remain competitive and the projected growth in production volumes, unless there is some force majeure, al- lows us to expect good sales volumes of meat and meat products abroad in 2022,” Yushin said. However, it is not clear at what point the current crisis will end and what the final version of the sanctions regime imposed on Russia will look like. The sanctions imposed on the Russian economy seemed ‘unimaginable’ at the beginning of the year, so given the high political uncertainty, nothing can be ruled out now.
Truck drivers have to wait days to cross the border between the EU and Bela- rus, while transit to Russia has been halted by sanctions.
30 ▶ POULTRY WORLD | No. 5, 2022
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