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Russian Pig Prices Break Records

14 April 2014

RUSSIA - Wholesale prices of live pigs in Russia have increased by more than 40 per cent since the beginning of 2014, surpassing the industry record of 100 roubles per kilogram, according to Cherkizovo.

The prices of live pig processors and retailers started to increase right behind it, although not as steeply. Alexander Kostikov, Cherkizovo’s Head of Communications and Investor Relations, noted that the rapid price increase began in March.

He said: “A month ago, the Company was selling live pigs for 74 roubles (RUB) a kilogram, including VAT, whereas last week the price had already increased to RUB109.”

According to Ekaterina Kumanina, Director of External Relations for the Dixy retail chain, some processed meat suppliers have already proposed price increases of seven per cent or more.

The wholesale price of live pigs in Russia has increased by more than 40 per cent since the beginning of 2014, surpassing the industry record of RUB100 per kilogram. The prices of live pig processors and retailers started to increase right behind it, although not as steeply.

On 29 January, Rosselkhozhadzor restricted supplies of live pigs, European pork and pork by-products due to an outbreak of African swine fever in Lithuania and Poland. Industry experts told RBC that domestic market prices spiked immediately after this.

In early January, the wholesale price of live pigs in the Central Federal District was about RUB72 a kilogram, and by early February it increased to RUB78 a kilogram.

Daria Snitko, the leading analyst at the Centre for Economic Forecasting of Gazprombank, reported that for the week of 31 March to 6 April, the price reached RUB102 a kilogram.

The Central District is Russia’s largest consumer of domestic pork and the distribution centre for meat imports to other federal districts. Therefore, this region is the price market-maker, explained Nikolai Birulin, leading analyst of the National Pig Farmers Union.

Alexander Kostikov, Cherkizovo’s Head of Communications and Investor Relations, noted that the rapid price increase began in March.

He said: “A month ago, the Company was selling live pigs for RUB74 a kilogram, including VAT, whereas last week the price had already increased to RUB109,” he said.

Rising prices should have a positive effect on the financial position of domestic companies in this sector, Ms Snitko said.

The country is short of 500,000 to 700,000 tonnes of pork, and large pig farmers could fill this need, so that the country would not be dependent on imported pork.

However, the uncertainty over government support is curbing the investment activity of livestock breeders, Mr Kostikov complained.

Furthermore, in his opinion, the new opportunities are just a temporary phenomenon. Importers bringing in meat from European countries are hoping for a prompt resumption of supplies, so they are not switching to orders from Brazil, the US and Canada but may do so if necessary.

According to the National Pig Farmers Union, in January and February 2014 alone, pork imports into Russia dropped by 14 per cent to 56,000 tonnes compared to the same period in 2013.

TheMeatSite News Desk



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