Food Safety in the Russia

The food security of Russia was formalized in January 2010when president Medvedev signed the “Food Security Doctrine”, which aims to see the country reach 85% self-sufficiency in meat and poultry by 2020. Business Monitor International (London, Great Britain) forecast self-sufficiency in poultry to be reached in 2013. Russia is using the tools to achieve such goals include slashes in import quotas. This year, US pork quotas were cut 43% from 100,000 to 57,000 tonnes. We expect demand will suffer as prices rise and forecast a decline in pork consumption for 2010. And Putin (2010)says:

We have taken a major decision in the interests of domestic producers—in 2011 we’ll cut poultry imports to Russia practically in half. This was not an easy decision but we’ve taken it with a view to reducing imports in general and strengthening domestic agriculture.

Less favourable weather means grain harvests for 2009/2010 expected to fall across the board following bumper 2008/2009 season. Wheat to fall 4.0% year-on-year to 61.1mn tonnes, corn to plummet 33% to 4.44mn tonnes, barley to drop 26% to 17.1mn tonnes.

Milk consumption forecast for 2010 revised upwards with improving Russian economy, which we now expect to grow 4.0% over the year. A slight year-on-year gain in milk consumption is expected, with the figure remaining around 12.1mn tonnes.

Balance of trade in goods expected to rise from US$303.3bn in 2009 to a forecast US$364.0bn in 2010. Russia is aiming at the expansion of wheat exports to Asia. With quality perception a challenge, Business Monitor International believes that it is likely to focus initially on more price sensitive South East Asian markets such as Indonesia, Vietnam and Malaysia. Russia plans to ship 1mn tonnes of wheat to the region in 2010. Labelling laws requiring milk made with milk powder to be called “milk drink” are causing trouble for milk processors. Market leader Wimm Bill Dann saw its profits drop to one-third of 2008 levels in 2009.

The US-Russian trade dispute over poultry exports may soon be at an end. US producers are expected to stop using the chlorine washes which caused the ban, with exports expected to resume thereafter. Yet, while US producers remain outlawed, their Russian counterparts should continue to benefit. The length of time it takes for exports to resume poses a risk to our production forecasts.