Nov 20, 2014
Brazilian Poultry Exports to Russia Soar as Result of Sanctions
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
As a result of the sanctions imposed on Russia by the United States and the European Union over the conflict in Ukraine, Russia imposed its own sanctions against imported items from the U.S. and the European Union. The results of those Russian sanctions are now becoming plainly evident.
After Russia imposed their sanctions on many imported meat products from the United States and Europe, they still needed to import meat products to meet domestic demand so they then turned to Brazil as a major source of meat imports. During the month of October, the USDA reported zero poultry exports destined for Russia while Brazil reported a record amount of poultry exports to Russia.
In October, Russia imported 33,600 tons of poultry from Brazil propelling it into the third most important market for Brazilian poultry exports behind only Saudi Arabia at 50,300 tons for the month and Japan at 40,500 tons. The October poultry exports to Russia were six times greater than in October of 2013.
For the last several years, Brazil had been exporting approximately 5,000 tons of poultry per month to Russia, but those exports really accelerated in recent months. In September, Brazil exported 20,000 tons to Russia which increased to 33,600 in October and it is expected to be even higher in November.
While Brazilian exporters are pleased with the increased business, they realize that the Russian market is very fickle and the sanctions could be lifted at any moment.
In fact, Brazilian meat exporters have recently experienced the inconsistencies of the Russian market first hand. Just two years ago, Russia imposed an embargo on much of the meat products from Brazil citing sanitary concerns in numerous Brazilian meat processing facilities. Brazilian officials never truly believed that unsanitary conditions were the real reason for the embargo and they sent countless trade missions to Russia in an attempt to get the embargo lifted. They made very little progress in their efforts until the conflict in Ukraine surfaced.
After Russia imposed their sanctions against the U.S. and the European Union, all of their concerns about the sanitary conditions in Brazilian meat processing facilities suddenly disappeared and they approved over one hundred meat processing facilities in Brazil as being authorized to export their products to Russia.