Required Report - public distribution

**Date:** 9/9/2005

**GAIN Report Number:** RS5066

RS5066

**Russian Federation**

**Poultry and Products**

**Annual**

**2005**

**Approved by:**

![](media/image1.wmf)Allan Mustard

American Embassy, Moscow

**Prepared by:**

Mikhail Maksimenko and Randall Hager

**Report Highlights:**

Russian poultry production continues to grow rapidly in part due to the
import quota and domestic prices which supports investment in the
industry, though demand is still greater than supply. Due to the
outbreak of avian influenza, animal and public health authorities have
taken steps to protect poultry facilities from this disease.

Includes PSD Changes: Yes

Includes Trade Matrix: No

Annual Report

Moscow \[RS1\]

\[RS\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Production 3](#production)

[Table 1. Broiler Meat Supply and Demand
4](#table-1.-broiler-meat-supply-and-demand)

[Table 2. Turkey Meat Supply and Demand
5](#table-2.-turkey-meat-supply-and-demand)

[Consumption 5](#consumption)

[Trade 5](#trade)

[Table 3. Poultry Meat Trade 5](#table-3.-poultry-meat-trade)

[Stocks 5](#stocks)

[Policy 5](#policy)

# Executive Summary 

Poultry production continues to grow due to steady investment in
production and processing facilities, the rising price of competing
meats, and continued introduction of new, processed poultry products;
Russia's poultry production forecast for 2005 was raised by two percent
to 740,000 metric tons (MT). Regarding trade, high domestic meat prices
kept poultry imports strong, and problems with poultry quota
administration in the first quarter again led to incomplete fill in
2005. The turkey production forecast is increased to 18,000 MT from
17,000 MT.

The avian influenza epizootic situation should not decrease poultry
production in 2006, as strict measures are being taken to prevent the
disease from spreading to commercial production facilities. Russian
importers continue to use the epizootic situation in exporting countries
to re-allocate poultry quotas. The use of this situation is contrary to
the quota scheme's historical country principle.

Poultry imports in January-June 2005 increased 33.1 percent year-to-year
to 577,500 tons, valued at \$359.4 million. Poultry was only imported
from non-CIS countries.

# Production

Russian poultry production grew rapidly in 2005 as the quota and high
prices of other meats supported significant producer investment. As
such, Russia's poultry production forecast for 2005 was raised by two
percent to 740,000 MT from the previous estimate, and should go higher
still in 2006. Broiler and turkey production will continue to grow in
2006.

According to Russian scientists, the avian influenza epizootic situation
is unlikely to influence poultry production if more resources are spent
on AI preventive and eradication measures.

### Table 1. Broiler Meat Supply and Demand

  --------------- -------------- ----------------- ---------- ----------------- ---------- ----------------- --------- -- --
  **PSD Table**                                                                                                           

  **Country**     **Russian                                                                                               
                  Federation**                                                                                            

  **Commodity**   **Poultry,                                                    (1000                                     
                  Meat,                                                         MT)(MIL                                   
                  Broiler**                                                     HEAD)                                     

                  2004           Revised           2005       Estimate          2006       Forecast          UOM          

                  USDA Official  Post              USDA       Post              USDA       Post                           
                  \[Old\]        Estimate\[New\]   Official   Estimate\[New\]   Official   Estimate\[New\]                
                                                   \[Old\]                      \[Old\]                                   

  **Market Year                                    01/2004    01/2005                      01/2006           MM/YYYY      
  Begin**                                                                                                                 

  Inventory       0              0                 0          0                 0          0                 (MIL         
  (Reference)                                                                                                HEAD)        

  Slaughter       0              0                 0          0                 0          0                 (MIL         
  (Reference)                                                                                                HEAD)        

  Beginning       90             90                60         80                49         60                (1000 MT)    
  Stocks                                                                                                                  

  Production      650            650               725        740               0          840               (1000 MT)    

  Whole, Imports  0              110               0          80                0          85                (1000 MT)    

  Parts, Imports  930            850               960        960               0          990               (1000 MT)    

  Intra EC        0              0                 0          0                 0          0                 (1000 MT)    
  Imports                                                                                                                 

  Other Imports   0              0                 0          0                 0          0                 (1000 MT)    

  TOTAL Imports   930            960               960        1040              0          1075              (1000 MT)    

  TOTAL SUPPLY    1670           1700              1745       1860              49         1975              (1000 MT)    

  Whole, Exports  0              0                 0          0                 0          0                 (1000 MT)    

  Parts, Exports  0              1                 1          1                 0          1                 (1000 MT)    

  Intra EC        0              0                 0          0                 0          0                 (1000 MT)    
  Exports                                                                                                                 

  Other Exports   0              0                 0          0                 0          0                 (1000 MT)    

  TOTAL Exports   0              1                 1          1                 0          1                 (1000 MT)    

  Human           1610           1639              1695       1810              0          1930              (1000 MT)    
  Consumption                                                                                                             

  Other Use,      0              0                 0          0                 0          0                 (1000 MT)    
  Losses                                                                                                                  

  Total Dom.      1610           1639              1695       1810              0          1930              (1000 MT)    
  Consumption                                                                                                             

  TOTAL Use       1610           1640              1696       1811              0          1931              (1000 MT)    

  Ending Stocks   60             60                49         49                0          44                (1000 MT)    

  TOTAL           1670           1700              1745       1860              0          1975              (1000 MT)    
  DISTRIBUTION                                                                                                            

  Calendar Yr.    0              0                 0          0                 0          0                 (1000 MT)    
  Imp. From U.S.                                                                                                          
  --------------- -------------- ----------------- ---------- ----------------- ---------- ----------------- --------- -- --

### Table 2. Turkey Meat Supply and Demand

  --------------- -------------- ----------------- ---------- ----------------- ---------- ----------------- --------- -- --
  **PSD Table**                                                                                                           

  **Country**     **Russian                                                                                               
                  Federation**                                                                                            

  **Commodity**   **Poultry,                                                    (1000                                     
                  Meat, Turkey**                                                MT)(MIL                                   
                                                                                HEAD)                                     

                  2004           Revised           2005       Estimate          2006       Forecast          UOM          

                  USDA Official  Post              USDA       Post              USDA       Post                           
                  \[Old\]        Estimate\[New\]   Official   Estimate\[New\]   Official   Estimate\[New\]                
                                                   \[Old\]                      \[Old\]                                   

  **Market Year                  01/2004                      01/2005                      01/2006           MM/YYYY      
  Begin**                                                                                                                 

  Inventory       0              0                 0          0                 0          0                 (MIL         
  (Reference)                                                                                                HEAD)        

  Slaughter       0              0                 0          0                 0          0                 (MIL         
  (Reference)                                                                                                HEAD)        

  Beginning       0              0                 0          0                 0          0                 (1000 MT)    
  Stocks                                                                                                                  

  Production      15             15                17         17                0          18                (1000 MT)    

  Whole, Imports  0              2                 5          1                 0          1                 (1000 MT)    

  Parts, Imports  91             75                93         80                0          85                (1000 MT)    

  Intra EC        0              0                 0          0                 0          0                 (1000 MT)    
  Imports                                                                                                                 

  Other Imports   0              0                 0          0                 0          0                 (1000 MT)    

  TOTAL Imports   91             77                98         81                0          86                (1000 MT)    

  TOTAL SUPPLY    106            92                115        98                0          104               (1000 MT)    

  Whole, Exports  0              0                 0          0                 0          0                 (1000 MT)    

  Parts, Exports  0              0                 0          0                 0          0                 (1000 MT)    

  Intra EC        0              0                 0          0                 0          0                 (1000 MT)    
  Exports                                                                                                                 

  Other Exports   0              0                 0          0                 0          0                 (1000 MT)    

  TOTAL Exports   0              0                 0          0                 0          0                 (1000 MT)    

  Human           105            91                114        97                0          103               (1000 MT)    
  Consumption                                                                                                             

  Other Use,      1              1                 1          1                 0          1                 (1000 MT)    
  Losses                                                                                                                  

  Total Dom.      106            92                115        98                0          104               (1000 MT)    
  Consumption                                                                                                             

  TOTAL Use       106            92                115        98                0          104               (1000 MT)    

  Ending Stocks   0              0                 0          0                 0          0                 (1000 MT)    

  TOTAL           106            92                115        98                0          104               (1000 MT)    
  DISTRIBUTION                                                                                                            
  --------------- -------------- ----------------- ---------- ----------------- ---------- ----------------- --------- -- --

# Consumption

Broiler consumption grew by more than five percent from 2004 to 2005 and
is expected to increase by another six percent in 2006. Turkey
consumption is also growing.

# Trade

Poultry imports in January-June 2005, valued at \$359.4 million,
increased 33 percent as compared to that period in 2004. All of this
trade came from non-CIS countries. High domestic prices of meat have
kept import demand strong, and with demand expected to expand as
consumer incomes increase, the need for additional poultry imports is
evident.

Brazil, which does not have a separate quota allocation, captured almost
20 percent of the Russian market.

### Table 3. Poultry Meat Trade

  ---------- ------------------- --------- -------------------- --------- ---------- --
                                           **World Trade                             
                                           Atlas**                                   

                                           **Russia - Imports**                      

                                           **0207 POULTRY                            
                                           MEAT,OFFAL**                              

                                           **Quantity**                              

                                                                                     

  ** **      ** **               ** **     **January - June**   ** **     ** **      

                                                                          **%        
                                                                          Change**   

  **Rank**   **Country**         **- KG -  **- KG - 2004**      **- KG -  **- 05/04  
                                 2003**                         2005**    -**        

             TOTAL               582,349   434,038              577,515   33,06      

  1          United States       306,670   285,199              363,899   27,59      

  2          Brazil              146,387   67,282               103,666   54,08      

  3          Germany             20,681    27,300               43,065    57,75      

  4          France              33,405    24,488               33,931    38,56      

  5          Belgium             11,988    5,989                8,246     37,69      

  6          United Kingdom      14,522    4,272                7,758     81,62      

  7          Canada              8,019     2,272                5,507     142,32     

  8          Netherlands         6,260     535                  3,461     547,14     

  9          Argentina           131       433                  2,713     525,94     

  10         Spain               3,630     1,624                2,626     61,65      
  ---------- ------------------- --------- -------------------- --------- ---------- --

Source: World Trade Atlas

# Stocks

Stocks in 2005 increased in comparison with the previous report. Large
shipments are expected to arrive by the end of the year so as to be
treated under the current quota limit, and not count against next year's
figures.

# Policy

The avian influenza outbreak that spread in Russia in July forced the
Federal Service for Veterinary and Phytosanitary Surveillance and the
Federal Service for Consumer Rights Protection and Human Welfare to
consider conducting unannounced inspections of Russian poultry and
poultry processing plants for compliance with sanitary and veterinary
requirements for poultry factories, poultry processing factories, and
egg product plants. They also will conduct random inspections of
wholesale warehouses and cold storage facilities for compliance with
storage and sales requirements for poultry meat and poultry products and
the presence of product documentation confirming quality and safety of
products. Poultry plants are operating in a \"closed\" mode to prevent
contact between commercial flocks and migrant and synanthropic birds.
Other means of prevention are being taken as well. These measures have
been proposed to prevent the infection of poultry with contagious
diseases and keep potentially hazardous products off the consumer
market.

Some Russian scientists say that the bird flu epidemic in Russia could
have been avoided and claim that the virus was detected later than it
could have been due to a lack of finances. According to sources, the
economic impact of AI in Russia came to almost 38 million rubles (USD
1.3 million), without considering the expenditures on special
anti-epidemic and quarantine measures, according to the Russian Ministry
of Agriculture.

The future impact of avian influenza will hinge on continued use of
prophylactic measures imposed to prevent infection of commercial flocks.
These include prohibiting employees of commercial poultry operations
from keeping their own birds at home, closing poultry operations to
outsiders, eliminating opportunities for wild fowl to come into contact
with domesticated poultry, and increased decontamination of vehicles
entering poultry operations. Another key issue will be development of an
efficacious vaccine for poultry against the H5N1 virus, a topic
currently being discussed.