The complete switch to domestic products is unlikely in the nearest future

15 october 2014 | IA REGNUM

On August 7, 2014 the Decree of the Government of the Russian Federation imposed a ban on imported dairy products and meat from the EU, US, Canada and some other countries, which have supported the sanctions against Russia. Experts note that foreign producers are extremely interested in the Russian market, but a fast replacement of exporters cannot be done.

Elena Razumova
Elena Razumova
Department for Expert Analytics

REGNUM News Agency quotes the expert of the Analytical Center Elena Razumova who considers that giving the high share of the imported meat and dairy products the complete switch to domestic products is unlikely.

The food safety for meat products can be ensured only in pork and poultry production, believes the expert. According to the data provided by the Russian Federal State Statistics Service, the imports compared to the domestic meat production (excluding sub products and meat products after processing) account for 30% and 15% respectively. In 2011 these proportions were 50% and 17%. However, despite the decrease of these indicators, the expert sees the risk in the on-going and relatively high dependence of these sectors on imports of genetic and breeding livestock.

“Before the food embargo, market saturation with processed meat products was evaluated as being high”, - said Ms. Razumova. – “Today, under the embargo conditions, the economic slowdown and the decline in purchasing capacity it is unpractical to increase the processing volume in short and middle-term, and it depends on favorable market conditions in regard to the long-term prospects”.

The situation concerning the livestock breading for both meat and dairy products sectors is more complicated. “We cannot fully replace the exports from the countries where such production is cheaper”, - considers Ms. Razumova. – “Among the barriers are: long investment lags (in average about 10-15 years), manufacturing cycles (fattening operations take 2 years minimum), high volatility of prices for livestock feed on external and domestic markets, higher costs for livestock maintenance, the small number of favorable climatic zones for an efficient breading of the livestock”.