The plan is edible: Russia set a record for meat exports
According to the Ministry of Agriculture, Russia exported more than 700,000 tons of meat and by-products last year, which is 27% more than in 2023. Including exports of pork products increased by a third, poultry products - by 25%, cattle meat - by 22%. Nevertheless, there are currently serious barriers to increasing supplies, the National Meat Association explains. These are huge difficulties with mutual settlements, and high transaction costs, which reach 4-6%. Details - in the material "Izvestia".
In physical terms
According to preliminary estimates of the Federal Center "Agroexport", the value of exports of meat and by-products last year increased by 24% and amounted to a record $1.7 billion. In the structure of supplies about 48% of poultry meat, 37% - pork, 14% - beef. Thus, Russian exports of poultry meat and by-products increased by 17% and reached $800 mln. Pork sales abroad increased by 42% and exceeded $610 mln, which is a record level. Beef shipments totaled more than $230 million, up 16% from 2023.
This result is a consequence of planned and long-term work to increase the volume of supplies of our products abroad, says the head of the executive committee of the National Meat Association, Sergei Yushin.
- An important factor for the 2024 results was the weakening of the national currency, and our products have thus become more competitive," he explains. - It is not yet as popular as, for example, Brazilian, American or Australian, but interest in it is growing all the time. The anomaly of record exports has been achieved thanks to the solution of important problems, in particular those related to payments. The fact is that today it is expensive - transaction costs reach 4-6%. The obstacle was the delay in the receipt of money, which slowed down shipments abroad.
Olga Epifanova, a member of the Federation Council Committee on Agrarian and Food Policy and Nature Management, notes that the dynamics of export growth remains stable even against the background of international competition. The range of exported products is also expanding.
- The positive point is that there is a significant decrease in imports of products from non-CIS countries in almost all directions already from the beginning of 2021. We started to eat more domestically produced meat," she emphasizes. - However, the only type of meat on which we are still noticeably dependent on imports is beef: beef cultivation is the longest (at least one and a half years) of all types of meat.
As the Ministry of Agriculture specified to Izvestia, the output of meat products is growing in Russia. Production of livestock and poultry for slaughter in 2024 in farms of all categories, preliminary, amounted to 16.74 million tons, which is the maximum in the history of Russia and the USSR. This includes record production of pigs and poultry for slaughter - 6.2 million tons and 7.1 million tons, respectively.
In 2023, according to Aidi-Marketing, in physical terms, exports of meat and edible meat by-products from Russia (excluding EAEU countries) amounted to almost 389 thousand tons worth $987 million. In the structure of exports, the predominant share was poultry meat and by-products - 62% in physical terms, followed by pork -19%, by-products (except poultry by-products) - 12%, cattle meat - 7%. The positive trend continued in the first half of 2024, with exports increasing by another 7.5% in physical terms.
- We consider such positive results to be a merit of the state support of the industry," says Artur Leer, Vice President of the Association of Exporters and Importers, Managing Partner of Lex Alliance Law Firm. - The main export destination for Russian poultry and meat is China. For pork, the situation began to change in 2016, when active work was resumed on the admission of products to China. Over the past 10 years, thanks to government efforts, three Russian enterprises received permission to supply pork to China in February 2024. This was preceded by thorough work with veterinary and customs services, including inspections by Chinese specialists at our enterprises.
According to Vneshtorgklub estimates, lamb exports from Russia in 2024 remained relatively small, but showed stable growth due to increased demand in the Middle East and Central Asia.
Export geography
There are no easy markets in the world and competition will continue to grow, says Ekaterina Luchkina, director of the association "Association of Meat Processors". She is convinced that it is necessary to increase the efficiency of production, constantly monitor the quality of products, and do not lower the bar on veterinary safety.
According to the WTO data, not only export but also import of meat and meat products to Russia from other countries is growing. Thus, for the first three quarters of 2024, the physical volume of meat and by-products imported into Russia increased by 35% compared to the same period in 2023. Domestic producers export meat and by-products mainly to China (60.7% of all meat and by-products in the first three quarters of 2024) and Kazakhstan (21.5%), while imports come from Brazil (40%), China (19.1%) and Argentina (13.2%).
At the same time, the weighted average cost of meat and by-products imported into Russia is lower than the cost of exports by 11%, i.e. domestic producers export more expensive meat products than those imported into our country. The most profitable direction for domestic exporters remains China: the weighted average cost of meat products export (per 1 kg in US dollars) is 1.8 times higher than the cost of Chinese imports, emphasizes the Center for Market Economics (CEM).
- In general, the highest weighted average cost of 1 kg of meat exported from Russia - in deliveries to Serbia and China: more than two times higher than the average cost of exports of meat products, for example, to Kazakhstan, - specifies the analyst of CER Irina Svetlova. - But Chinese exporters supply their meat products to Russia at a cost 1.8 times lower than the weighted average cost of, for example, Brazilian and Paraguayan meat products.
For Russian producers, the search for export markets is often accompanied by barriers that vary depending on the region, product and level of competition, says Dmitry Orlov, president of the international organization Vneshtorgklub.
Russian meat is most successful in finding consumers in the Middle East and North Africa, Southeast Asia and the CIS. The Middle East and North African regions remain one of the most promising markets for Russian meat, especially beef, chicken and mutton. Demand here is explained by the high demand for food products, as well as population growth, says the head of the Foreign Trade Club.
Traditional markets of neighboring countries, such as Kazakhstan, Belarus and Armenia, remain stably important for meat sales. A simplified trade regime is in effect here, which makes exports economically profitable.
Difficulties on trade routes
Despite resounding successes on foreign markets, Russian exporters of meat products still face a number of difficulties, complains Olga Magomedova, a researcher at the Laboratory for Analysis of Best International Practices of the Gaidar Institute. First of all, they have to overcome the competitive threshold for entering foreign markets. For example, in 2023 Russia entered the top 5 countries - suppliers of pork to China, but still its share does not exceed 5%.
Russian food exports need to compete to expand their consumer audience, says Olga Magomedova. Also, some countries have national peculiarities that apply to meat trade. For example, one of the largest importers of meat from Russia is Saudi Arabia. But supplies to this market require a certificate confirming that the product is halal.
- Still, Russia has managed to reorient its transactional areas, significantly increasing exports to China, Vietnam and the Middle East, while government support for agrarians, improved meat product standards and increased labor and capital productivity have allowed Russian producers, in addition to meeting domestic demand, to become more competitive in the foreign market," says Galina Ryazanova, associate professor at the State University of Management. - Working on trade agreements and building successful eastern supply chains has also offset the loss of western markets under sanctions.
Christina Romanovskaya, head of the Lazarevskoye agroholding company, laments that logistics now eats up the lion's share of the export price. According to her estimation, it is about 40%.
- Thus, the price offered by traders is not always competitive with the domestic market," says the agro-producer. - Also, not all companies are able to get an export quota for sales. For the most part, this is available to large businesses that have an overproduction of products relative to the needs of the Russian market.
According to her, the export market for meat is promising, but it is not yet 100% debugged and it will take a long time before it becomes operational, convenient and, most importantly, profitable for agricultural producers.
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