On Aug. 7, Russian President Vladimir Putin issued a decree banning import of many agricultural products from countries that have imposed economic sanctions on Russia as a result of the ongoing conflict in Ukraine. The list of affected countries includes the United States, Canada, Australia, Norway and the 28 members of the European Union.
The ban is to be in effect for a period of one year, although news reports quoted Russian Prime Minister Dmitry Medvedev as stating that it could be lifted earlier, “if our partners demonstrate a constructive approach.”
Because U.S. beef, pork and poultry are on the list of products included in the ban, all export requirements have been removed from the Export Library for Russia and replaced with the following statement:
Russia has banned the import of all beef, pork and poultry and beef, pork and poultry products from the United States. Beginning on August 7, 2014, no certificates for export of these products to Russia should be issued. Information about in-transit shipments certified for export to Russia prior to August 7, 2014, will be provided as soon as it becomes available.
USMEF continues to gather more details on this matter, including how Russian customs officials intend to handle in-transit shipments. Customs officials have issued an instruction letter stating that clearance will be allowed until 12:00 a.m. on Aug. 9, if documents are provided “confirming the actual payment for the imported shipment according to the contract.” USMEF will report further details on clearance procedures for in-transit shipments as they become available.
The following is a brief overview of the state of U.S. pork and beef trade with Russia, prior to this decree being issued:
Russia suspended all imports of both U.S. beef and pork in February 2013, due to its policy on the use of beta agonists in livestock production. U.S. beef has been effectively shut out of the market since that time, although one U.S. veal plant was approved to ship to Russia.
U.S. pork was also shut out of the market until March of this year, when Russia agreed to resume imports of U.S. pork produced under certain conditions, including documentation that the animals from which the pork is derived have not been fed beta agonists. Only two pork slaughter plants regained approval to export to Russia, so this year’s cumulative pork/pork variety meat exports are far below the volumes shipped prior to the February 2013 ban. However, monthly totals had been increasing:
- March: 284 metric tons (mt), valued at $648,000
- April: 1,429 mt, valued at $6.4 million
- May: 6,851 mt, valued at $22.7 million
- June: 9,371 mt, valued at $34.3 million
In 2012, the last full year in which the U.S. industry had access to the Russian market, export totals were:
- Beef/beef variety meat: 80,408 mt valued at $307 million
- Pork/pork variety meat: 98,830 mt valued at $281.7 million
As for the impact on Russia’s other trading partners, it is important to note that Russia had already suspended pork imports from the EU in late January due to findings of African swine fever in Lithuania and Poland. Beef imports from Australia have been suspended since early April due to Russia’s enforcement of a hormone ban.
In the red meat sector, the product most impacted by Russia’s retaliatory sanctions is likely to be Canadian pork. Through June, Russia was Canada’s third-largest pork export market at 80,539 mt – more than double the volume from the same period last year and accounting for about 15 percent of Canada’s total exports. Russia must now rely almost entirely on Brazil and Chile for its pork imports, which were already running 40 percent below last year’s low levels.
With the United States and Australia absent from the Russian beef market, Russia’s primary beef suppliers are Brazil and Paraguay – which have accounted for about 50 percent and 20 percent, respectively, of Russia’s 2014 beef imports.
Data sources: USDA and Global Trade Atlas