990616 Shrinking Russian Meat Market Faces New Woes

Moscow - Russia's meat eaters faced a new blow on Thursday as imports from China were banned, just a week after poultry and pork from Belgium were taken off the menu and French and Dutch sales were restricted.

The European Union also suspended deliveries of pork in a food aid program.

Russian meat consumption has already fallen by more than 10% over the last year as rouble devaluation last August made imports too expensive for many consumers.

Consumption of all meats fell to 10.3 kilos per head in the first quarter of this year from 11.4 kilos in the first quarter of 1998, Nathan Hunt, Moscow- based president of Skylight Inc, a U.S. meat trading company, said.

Belgian poultry and pork were banned last week and restrictions placed on French and Dutch poultry following the discovery of animal feed contaminated with dioxin in Belgium.

Meat from other European Union countries is still on sale.

A source at the European Commission's Moscow delegation said that representatives of all EU states met at the German Embassy on Wednesday to share information.

“The French representative said Russia has asked for more information on French poultry imports in the first half of the year,” he said, adding that Russia also asked for more details on Dutch poultry and pork imports in the same period.

Immediately after the dioxin scare broke, meat prices on the Russian market jumped around 10% but the impact was short-lived, Skylight Inc's Hunt said.

“We saw a swift, shock reaction in one or two days following the announcement which quickly subsided due to the Russian government's concession to accept chicken from two of the three affected countries, France and Holland, if the certificate of conformity is issued after June 1,” he said.

“If Russia continues to make reasonable concessions to the EU, then I think a major shock will be avoided.”

While the U.S. is traditionally Russia's main source of poultry, the EU has the bulk of the pork and beef markets.

A U.S. embassy spokesman said that until last August's rouble devaluation, Russia bought some 90,000 tonnes of U.S. poultry per month, worth around $1 billion per year. This year, he said, the monthly volume was down to 18 to 20,000 tonnes.

Hunt said the European Union controlled almost the entire Russian pork market through a policy of subsidies.

“The EU is subsidising pork to the tune of about $800 per tonne right now and coincidentally that happens to be the amount by which European prices are lower than American prices,” he said.

He said the Russian market for imported pork was 50,000- 60,000 tonnes per year.He added Europe traditionally controlled the Russian beef market, as U.S. and Canadian supplies were too expensive.

The meat market is now slow as European sellers, fearing new rules which may apply to the whole Union, are unwilling to trade. “It doesn't make sense to sign a contract at any price if there's going to be a ban on your meat in two days,” Hunt said.

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