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Russian pork producers aim to capture 10% of China's pork import market from scratch in the coming years, trying to take advantage of trade tensions between the European Union and China, the world's largest pork consumer.

Russia did not export pork to China until February, when Beijing allowed three Russian producers to sell pork in China's $3.5 billion import market, which is dominated by EU producers with a 51% share.

Trade is helping to strengthen economic ties between Russia and China amid increasing Western sanctions against both countries.

The EU recently imposed upfront tariffs of up to 37.6% on electric vehicles imported from China to counter what it considers unfair subsidies. In response, China named Danish, Dutch and Spanish pig producers as targets of its anti-dumping investigation.

“For us, trade tensions are a chance to demonstrate our competitiveness in the Chinese market,” Yuri Kovalev, head of the National Union of Pig Farmers of Russia, told Reuters , adding that producers are not trying to exploit the tensions for their own purposes.

According to Kovalev, Russia's goal is to provide 10% of Chinese pork imports within three to four years.

In doing so, it will face stiff competition from other major pork exporters such as Brazil , as well as growing Chinese production. Demand for pork in China is also falling, although it still consumes about half the world's pork, or 53-54 million tons per year.

Premium prices Russia's pork production will reach 5.2 million tons in 2024 , up from 4.9 million in 2023 and a post-Soviet low of 1.5 million in 1999,

Kovalev said . The record figure for the Soviet Union was 3.5 million tons in 1989. In terms of current production volume, Russia ranks fourth after China, the EU and the USA and is on the same level as Brazil. China's pork and by-product imports fell 27.3% year on year to 1.11 million tonnes in the first half of 2024, customs data showed. According to forecasts from the US Department of Agriculture, about 50-60 thousand tons of Russian pork will go to China this year, which will amount to about 3% of total Chinese imports. Most Chinese imports from the EU are offal, such as ears and feet, rather than muscle meat . Russian domestic demand for by-products is low, as is the case in the EU. According to Kovalev, currently Russian exports









pork is 60% meat and 40% by-products, which is similar to Chinese imports.

Russian private producers that are allowed to sell pork to China - Miratorg, Velikoluksky Pig Breeding Complex and Rusagro - are among the five largest Russian pork producers.

According to our conservative estimates, this year we will export 10,000 tons to China,” said Alexander Tarasov, Deputy General Director of Rusagro. “Prices will be at a premium of 30-40% to domestic prices.”

Help from sanctions

The Russian pork industry declined after the collapse of the Soviet Union in 1991. In 2005, the industry began to grow again, helped by government support and protectionist measures. Kovalev estimates that up to $25 billion has been invested in the industry since 2005.

In 2008, meat processing plants suffered a major setback due to the outbreak of African swine fever, which brought heavy losses to producers and effectively closed the Chinese market to Russia for 15 years.

However, pork production quickly recovered and received a significant boost from the EU ban on pork imports to Russia in 2014.

According to Agriculture Minister Oksana Lut, Russian pork exports to all countries will rise to 310,000 tons in 2024, including live pigs.

Russian producers have already taken a 50 percent share of Vietnam 's pork imports and export to about 20 additional markets.

“We, as newcomers, have one of the most modern pork production sectors in the world,” Kovalev said.

Miratorg said it has made the first deliveries from its logistics center in the Belgorod region of Russia to the port of Nansha in southern China, both by rail and sea.

The company said total pork exports rose 70% last year and it plans to increase pork production by 5% to match rising demand.

“Russia, of course, has natural resources, food supply and fresh water reserves to increase meat production several times,” says Marina Demidova, head of the export department of Miratorg.

Plans to expand production could be hampered by delays in payments between Russia and China as Chinese banks, under pressure from Western regulators over sanctions against Russia, have become more cautious about processing payments.

Banking sources told Reuters that food exports could be one area where the two countries could experiment with barter trade schemes. Kovalev said he was not aware of any barter transactions.