Update on EU-Russia Pork Impasse

According to the Russian business news outlet Kommersant, Russia and the European Union have agreed to try to settle several current trade disputes outside of the WTO dispute settlement process. One of these disputes is Russia’s suspension of imports of EU pork due to African swine fever, which has been in effect since Jan. 30, 2014. The news report followed a meeting between Russian Minister of Economic Development Alexey Ulyukaev and EU Trade Commissioner Cecilia Malmström, but few details are available at this time.

Most EU-to-Russia pork trade is also blocked due to the import embargo Russia issued on most food products from the EU, U.S, Canada, Australia and Norway in August 2014. But the embargo does not apply to pork fat or offal, and some EU member states would like to negotiate individually with Russian officials on resumption of exports of these products. This has been opposed by other member states and the European Commission, which contend that the issue should be handled only on an EU-wide basis. EU exports of these products to Russia were valued at $525 million in 2013.

In the wake of recent farmer protests, the European Commission recently announced additional aid to farmers, including further promotional support in 2016 – up from the 81 million euros already committed – with a specific portion to be reserved for dairy and pork, including generic pork promotions within the EU market. More details on the aid package are available online.

Meanwhile EU hog prices may have bottomed for the time being, though the seasonal trend is for prices to move lower in the fourth quarter of the year. Prices during the final week of August were 1.42 euros per kilogram, down 13 percent year-over-year and 16 percent below the five-year average. In U.S. dollars, prices were $73.21/cwt, down 25 percent year-over-year but the highest since June, reflecting the recent strengthening of the euro.