How did COVID-19 affect the Russian pork market

Many argue that despite the CORONAVIRUS, the decline in oil prices and the global lockdown, the Russian economy has weathered 2020 well. Meatinfo.ru tried to figure out how covid-19 affected the pork market in RUSSIA.

The HEAD of the M16.TECH platform, which includes the Meatinfo information and analytical portal, Sergey Pavlyuchenko notes that the pig sector has proven its readiness to withstand the challenges of the pandemic. Pork production in 2020 was significantly higher than in 2019.

it was in 2020 that, despite all the obstacles, new production facilities were put into operation. This factor increased production in slaughter weight by 8.9% in all categories of farms. But the largest increase is observed in the industrial sector of pig breeding - by 10.8% per year.

Most pork in Russia is produced on the territory of the Belgorod region, it is here that 16.8% of all pork produced in the country is produced. A good increase in the production of this MEAT was also shown by the Kursk (+65 thousand tons), Pskov (+34 thousand tons) and Tambov regions (+33 thousand tons).

“The reason for the sharp restriction on pork imports was the coronavirus, the devaluation of the ruble and the introduction of a flat duty. Thanks to these factors, Russian-produced pork meat has become price-competitive in the global and domestic markets. Therefore, we should not expect an increase in imports,” says Sergei Pavlyuchenko, but emphasizes that in order to show that Russia complies with WTO requirements, small imports will still be possible (up to 50-100 thousand tons per year).

Also in 2020, more pork was exported than in 2019. Most of the deliveries were made to Vietnam (brisket and cuts 47%), Ukraine (carcasses and half carcasses 80%) and Hong Kong (brisket 93%).

According to experts, due to increased global demand for meat and increased production, pork exports will continue to grow and in 2021 may exceed 250 tons, which in turn may become an important driver of the Russian pork market.

At the end of 2019 and beginning of 2020, the average prices for pork meat were at a fairly low level. However, in mid-2020, feed price increases accelerated and outbreaks of African swine fever became more frequent, which in turn provoked a jump in the price of pork meat.

In general, the head of Meatinfo notes, the coronavirus did not have a special impact on the pork sector in 2020. In part, consumer preferences have changed, shifting towards semi-finished products, but the pandemic did not affect the consumption of pork meat and production volumes. The sector has been able to avoid labor shortages, as has happened in many countries. Also, the Russian EXPORT of pork meat did not suffer too much from covid restrictions.

However, the Russian pork market failed to completely avoid the negative impact of viruses. However, the “fly in the ointment” in this case was not covid, stresses Sergey Pavlyuchenko, but the African swine fever virus.

As the fourth quarter of 2021 begins, let's take a look at what the pig industry has been through this year. The year started with a big commodity rally. What a dramatic change - first in the price of grain, and then, a little later, in the price of pigs. Demand for pork was extremely strong throughout the year due to strong domestic demand and export markets.

This year, the incidence of ASF was slightly higher overall, and its impact on the market was much stronger. Many producers affected by ASF reported higher sow mortality and this affected how much pork was available on the market.

2021 has had its challenges, but overall most producers have been well positioned, even at higher feed costs, for potential returns with improved market demand.

“Nevertheless, as we look to the future, there are some tough questions on the horizon: Will demand for pork remain as strong? What will be the supply of pork in 2022? Will there be growth? Will there be problems in the industry due to difficulties with the labor force?”, the expert emphasizes.

According to Sergey Pavlyuchenko, it is too early to give unambiguous forecasts for the further development of the sector, especially against the backdrop of a new (fourth!) wave of coronavirus and new lockdowns, but there is still hope that the pork sector will be able to survive the pandemic as successfully as before next year. .

The Meatinfo.ru project is the largest community of meat market participants in the CIS and provides ample opportunities for work, communication, and the search for new contacts. Meatinfo.ru has been operating since 2006 and during this time has gained a very wide popularity among enterprises engaged in the production, import, trade and processing of meat and meat products.