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Russia Eyes New Food Importers to Sustain Supplies

19 August 2014

ANALYSIS - The Russian ban on meat and food products is starting to bite and could have a dramatic effect on the global food market, writes Chris Harris.

Already Russia seems to be turning to third countries away from those named in the ban for supplies.

With the US, Canada, the EU, Australia and Norway out of the picture Russia is looking to Brazil, Chile, Ecuador and China to supply its needs.

Over the last week the Russian veterinary and food safety authority has approved several food processing operations in Chile and Brazil for export to the Russian Federation.

It has cancelled the bans that had been imposed on the Chilean fish processing plants of Acuinova Chile SA; and Salmones Andes SA.

The Russia authorities have also approved a number of other plants for export largely of fish products including CataloniaseafoodS.A, INTACProcesosSpA, ComercialyServiciosAustralLtda, PiscicolaEntreRiosLtda, PesqueraPacificFarmerLtda, PesqueraTorresdelPaineLtda, SociedadPesqueraLandesS.A, ComercialyConserveraSanLazaroLtda, SalmonesCamanchacaS.A, FilomenaTeranCruzElaboradorayComercializadoraEIRL and SurprocesoS.A. largely for fish fish products and custaceans.

Fve other enterprises are having their certificates redesignated and Frigorifico Patagonia SA has been approved for the export not only of fish and custaceanss but also livestock, including calves.

Talks were being held last week with government officials from Ecuador over opening up more trade links between the countries.

Ecuadorean authorities have indicated that 36 companies are ready to increase supplies of fish and seafood, and another 23 companies are looking to create the mechanism to start exporting in particular milk powder, cheese, mozzarella cheese and condensed milk.

Ecuador also plans to significantly increase the supply of fruit and vegetable production in the near future.

It is expected that teams of veterinary inspectors will shortly leave for Ecuador to inspect prospective exporting plants.

This week, Rosselkhoznador raised the restrictions on exports of pork and pork products from Brazil largely from one of the country’s leading food producers, BRF.

The Russian authorities had been v=concerned about the possibility of the use of the growth promoter ractopamine and while issuing a warning to the Brazilian processors to keep a close watch on products and production, the veterinary authorities raised the bans.

They also lifted bans on beef and beef products from the leading Brazilian beef processor JBS.

Russia has also entered negotiations with China over potential exports of pig meat.

Reports in Russia say that the head of Rosselkhoznador, Sergei Dankvert
is in the process of preparing a list of Chinese companies that would be allowed to supply pork to Russia.

Li Guoxiang, deputy director of the Rural Development Institute at the Chinese Academy of Social Sciences in Beijing, said: "China is the world's biggest pork producer and has a well-developed pork processing industry, which has implemented strict quality control on its exported pork products.

"This move is a sign that Russia is no longer just importing China's vegetables and fruit," said Li.

"The nation will purchase more Chinese meat and farm products to reduce supply pressure while the diplomatic relations between Russia and the West remain unclear."

However, in Europe the Russian embargo starting to hit home and this week the European Commission took the first steps to support part of the market.

The European Commission has introduced support measures for certain perishable fruits and vegetables.

Dacian Ciolos, EU Agriculture and Rural Development Commissioner, said: “Taking into account the market situation following the Russian restrictions on imports of EU agricultural products, with effect from today, I am triggering CAP emergency measures which will reduce overall supply of a number of fruit and vegetable products on the European market as and when price pressures become too great in the coming months.

“All farmers of the concerned products - whether in producer organisations or not - will be eligible to take up these market support measures where they see fit. Acting early will provide an efficient support to the price paid to producers on the internal market, help the market adjust and be cost effective."

The ongoing market situation for all products will be discussed in another meeting with EU experts and experts from the European Parliament in Brussels on Friday.

The European Commission said it will continue following markets development for all the sectors affected by the Russian ban on agriculture and food products in close contacts with Member States and will not hesitate to support further sectors heavily dependent on exports to Russia or to adapt the measures already announced, if necessary.

The move was welcomed by the French Agriculture Minister Stéphane Le Foll who said that that a Council of Agriculture Ministers would be held specifically on this issue around 5 September.

However, the French meat industry organisation SNIV called the Russian embargo catastrophic.

“It is essential that the WTO, the European Commission, the Member States and France quickly enter into negotiations with Russia because the consequences on employment and the future of French meat companies are seriously compromised by this radical measure,” SNIV said.

Across the Atlantic in Canada, Florian Possberg from the Saskatchewan Pork Development Board said that the loss of the Russian market could cost Saskatchewan producers alone C$20 million.

Chris Harris

Chris Harris

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