Russian Meat Sector: Time of opportunities or Time of uncertainty?

Transcription

1 Russian Meat Sector: Time of opportunities or Time of uncertainty? Sergey Yushin National Meat Association UECBV AGM and the YEMCo Autumn Conference September 2014, Barcelona

2 Meat Consumption per Сapita in (kg/year) % 74,7 kg ,6 kg ,6 kg poultry pork beef mutton 10 0 Source: NSS

3 Meat Consumption Structure in Russia in 2013, % 41% 23% beef pork poultry 36% Source: NMA 3

4 Number of New Farms Built in Pig farms 85 Poultry Source: Ministry of Agriculture of the Russian Federation Beef farms 4

5 2,500 2,000 1,500 Meat and Poultry Production January-June (thousand tonnes, slaughter weight) January June 2014 г. / January June 2013 г., % beef -2,5% pork +7,7% poultry +5,2% 1,304 1,404 1,834 1,929 1, beef pork poultry January-June 2013 January-June 2014 Source: Russian Federal State Statistics Service 5

6 2,500 2,000 1,500 1,000 Industrial Meat and Poultry Production in Russia January-July (thousand tonnes, slaughter weight) January July 2014 г. / January July 2013 г., % beef -2,0% pork +13,1% poultry +5,8% 1,147 1,297 1,998 2, beef pork poultry January-July 2013 January-July 2014 Source: Russian Federal State Statistics Service 6

7 TOP-20 Pork Producers in Russia in 2013 (thousand tonnes, live weight) Miratorg Cherkizovo Agro-belogorje Rusagro The share of these 20 producers amounted to 54,2% of the overall industrial pork production in Russia in

8 % 75% 50% 25% Structure of Meat and Poultry Production by category of producers, % 10% 9% 9% 1% 1% 1% 41% 35% 28% 90% 90% 89% 63% 62% 61% 2% 2% 3% 70% 62% 56% 5% 6% 6% 32% 32% 32% backyards small farms 0% industrial production Source: Russian Federal State Statistics Service 8

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10 To Invest or Not To Invest (Pros and Contras) High meat and poultry prices High margins Good harvest 105 mln t Comfortable feed prices Declining production in the back-yards and more space on the market Meat production state priority Growing competence Better understanding of consumer needs Slow economy growth Possibly decreasing disposable incomes Shortage of bank loans and growing interest rates ASF and other diseases Unpredictable import volumes Exchange rates State budget deficit? Shortage of qualified top-managers for fig agricultural production Further liberalization of trade (FTA, CU, CIS etc.)

11 Forecast for Meat Production in Russia (thousand tonnes) Production at new farms: Pork tt Poultry +900 tt Beef +280 tt % % 4000 beef pork poultry Source: Ministry of Agriculture of the Russian Federation, NMA, NSS, RPU +14% 11

12 What Affects Import of Meat in 2014 Animal diseases (ASF-related ban from EU) Feed additives and hormones (USA, Australia, Canada) Strict veterinary requirements of the Customs Union not enough establishments approved High export prices for the Russian market Exchange rates Monopoly of some exporting countries Growing demand on internal and international markets Decree on Protection Measures of August 6 th 2014

13 About 40 thousand tonnes of meat and meat products from USA, EU, Norway and Canada worth 140 million dollars were in transit (road/sea) when the Government s list of products under the ban was published

14 Import of Meat to Russia January-June (CIS, offals, fat included, thousand tonnes) African Swine Fever in EU Ractopamine in USA and Canada Imported pork (including Belarus) and High pork export products prices share for Russia in pork USD/Ruble consumption exchange exceeds rate 30% Slower economy Stagnation of consumption and change of consumption trends beef pork poultry Source: NMA 14

15 Import of Meat to Russia January-August (CIS, offals, fat not included, thousand tonnes) / ,% Beef -9,0% Pork -35,3% Poultry -16,4% beef pork poultry Source: NMA 15

16 Meat Import Share in Consumption in Russia in 2013,% Meat Import Share in Consumption in Russia in 2014*,% 13% 8% 26% 34% beef pork poultry 10% 30% beef pork poultry * National Meat Association s forecast 16

17 Structure of Chilled Beef Import to Russia , % CIS countries 23,6% EU 39,0% Source: NMA Uruguay 5,2% Paraguay 1,2% New Zealand 2,0% Brazil 23,1% Australia 4,5% Argentina 1,4% 17

18 Source: NMA Argentina 1,7% Australia 0,8% Structure of Frozen Beef Import to Russia , % EU 5,5% CIS countries 1,7% Brazil 60,6% Paraguay 26,5% Uruguay 2,9% Nicaragua 0,1% New Zealand 0,2% 18

19 Structure of Pork Import to Russia January-June 2014, % EU 8,6% Brazil 39,9% Canada 41,1% Source: NMA Serbia 2,0% CIS countries 0,4% Chile 3,4% USA 4,2% Paraguay 0,3% 19

20 Germany 10% Ireland 1% Structure of Pork Fat Import to Russia Denmark 11% , % Italy Netherlands 9% 11% France 11% Poland 5% Belgium 5% Canada 23% Hungary 4% Austria Serbia 3% Chile Source: NMA 2% 2% USA 1% 20

21 Germany 8% Hungary 4% Belgium 8% Austria 7% Serbia Switzerland 2% 0,3% Source: NMA Structure of Pork Offals Import to Russia ,% Ireland 3% Denmark 11% Chile 3% USA 3% Italy 11% Netherlands 21% Paraguay 1% Canada 7% Poland 2% Portugal 2% Finland 2% France 5% Sweden 1% 21

22 Argentina 1,3% Structure of Poultry Import to Russia Brazil , % 4,8% EU 15,9% USA 74,9% CIS countries 2,5% Turkey 0,5% Source: NMA 22

23 Resources of Beef, Pork and Poultry in * (thousand tonnes) * to 2013,% beef % pork % poultry unchanged TOTAL: % *National Meat Association forecast 23

24 Wholesale Prices for Live Pigs and Pork in Russia, rubles/kg New ban on import Pork carcasses EU ASF-related ban Slaughter pigs Source: NMA 24

25 Wholesale Prices for Poultry Cuts in Russia, rubles/kg Boneless breast EU ASF-related ban New ban on import whole breast whole chicken Source: NMA 25

26 Wholesale Prices for Beef in Russia, rubles/kg butt New ban on import trimming 80% Source: NMA 26

27 Export Prices for Beef CIF Sankt-Petersburg, USD Source: NMA 27

28 Export Prices for Brazilian Pork CIF Sankt-Petersburg, USD Source: NMA 28

29 Impact and Consequences of Decreased Import Government attention to price hikes Looking for new suppliers Belarus benefits from the ban Meat processing growing losses Reemerging of illegal trade Retail vs Processing who gets meat? Consumption changes Consumer concerns 29

30 Rosselhoznadzor is holding negotiations on the subject of meat imports from: pork Poultry,milk products beef beef Source: Rosselhoznadzor 30

31 African Swine Fever in Russia in 2014* Number of outbreaks in 2014: Among wild boars 86 Among domestic pigs 32 among them in industrial holdings 3 Number of animals slaughtered> *- according to informarion from Rossselhoznadzor Source: Rosselhoznadzor 31

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33 Conclusions Good market for Russian producers Government will stimulate more investments, increase support Investors are ready to invest even if and after the ban is lifted WTO ASF dispute unclear outcome Importers loose market and money, some want to invest in production Processing plants want to invest/build/buy to ensure their own raw material supply New suppliers (China, India? Thailand, Turkey, Mongolia?) will benefit form the ban Trade has become victim to political ambitions and lack of dialogue between business and politicians Russia will continue its pace to self-sufficiency

34 THANK YOU Sergey Yushin National Meat Association