Required Report - Public distribution

**Date:** 3/9/2009

**GAIN Report Number:** RS9011

RS9011

**Russian Federation**

**Livestock and Products**

**Livestock Semi-Annual Report**

**2009**

**Approved by:**

![](media/image1.wmf)Mary Ellen Smith

U.S. Embassy

**Prepared by:**

Erik Hansen, Mikhail Maksimenko

**Report Highlights:**

Pork production is expected to increase 4 percent in 2009, due in most
part to large investments in swine production in 2007-08, higher
reproductive yields and government measures to curb imports. The pig
crop is expected to increase by 4.3 percent in 2009 and will equal 43.6
million pigs. Beef production is expected to decrease 3 percent in 2009
as poor cattle husbandry and generally negative profitability continues
to spook potential investors into this field. In keeping with a long
decline in the cattle sector, low productivity and reproductive
inefficiency are expected to decrease cattle herds by 2 percent in 2009.
Red meat imports reached 1.6 million MT in CY 2008 -- up 12.3 percent by
volume compared to 2007. The total value of these meat imports was
\$4.86 billion in 2008 compared to \$3.4 billion a year earlier. Retail
prices of meat and poultry increased in Russia by more than 23 percent
in 2008 while the average growth of all food prices increased by nearly
18 percent.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Moscow \[RS1\]

\[RS\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Overview 3](#overview)

[Production 4](#production)

[Table 1. Russia: Average Farmgate Prices, in Rubles/MT, Live Weight
5](#table-1.-russia-average-farmgate-prices-in-rublesmt-live-weight)

[Table 2. Russia: Livestock Conversion Factors: Calculations of
"Cow-Equivalent Units"
5](#table-2.-russia-livestock-conversion-factors-calculations-of-cow-equivalent-units)

[Consumption 5](#consumption)

[Production, Supply and Demand Tables
6](#production-supply-and-demand-tables)

[Table 3. Russia: Production, Supply and Demand of Live Cattle, in 1000
Head
6](#table-3.-russia-production-supply-and-demand-of-live-cattle-in-1000-head)

[Table 4. Russia: Production, Supply and Demand of Beef, and Veal, in
1000 MT
7](#table-4.-russia-production-supply-and-demand-of-beef-and-veal-in-1000-mt)

[Table 5. Russia: Production, Supply and Demand of Live Pigs, in 1000
Head
8](#table-5.-russia-production-supply-and-demand-of-live-pigs-in-1000-head)

[Table 6. Russia: Production, Supply and Demand of Pork Meat, in 1000 MT
9](#table-6.-russia-production-supply-and-demand-of-pork-meat-in-1000-mt)

[Stocks 9](#stocks)

[Table 7. Russia: Feed Stocks as of January 1, 2009, in MMT Feed Units
10](#table-7.-russia-feed-stocks-as-of-january-1-2009-in-mmt-feed-units)

[Trade 10](#trade)

[Table 8. Russia: Meat Imports, CY 2006-2008, Quantity in MT
11](#table-8.-russia-meat-imports-cy-2006-2008-quantity-in-mt)

[Table 9. Russia: Meat Imports, CY 2006-08, in Million USD
11](#table-9.-russia-meat-imports-cy-2006-08-in-million-usd)

[Table 10. Russia: Frozen Beef Imports, HS 0202, CY 2006-08, in MT, by
Countries
11](#table-10.-russia-frozen-beef-imports-hs-0202-cy-2006-08-in-mt-by-countries)

[Table 11. Russia: Imports of Frozen & Fresh Pork Imports, HS 0203, CY
2006-08, in MT, by Countries
12](#table-11.-russia-imports-of-frozen-fresh-pork-imports-hs-0203-cy-2006-08-in-mt-by-countries)

[Table 12. Russia: Imports of Edible Animal Offals, HS 0206, CY 2006-08,
in MT
12](#table-12.-russia-imports-of-edible-animal-offals-hs-0206-cy-2006-08-in-mt)

[Table 13. Russia: Imports of Edible Animal Offals, HS 0206, CY 2006-08,
in MT, by Countries
12](#table-13.-russia-imports-of-edible-animal-offals-hs-0206-cy-2006-08-in-mt-by-countries)

[Table 14. Russia: Imports of Pig and Poultry Fat, HS 0209, CY 2006-08,
in MT, by Countries
13](#table-14.-russia-imports-of-pig-and-poultry-fat-hs-0209-cy-2006-08-in-mt-by-countries)

[Table 15. Russia: Imports of Prepared Meats and Sausages, CY 2006-08,
in MT
13](#table-15.-russia-imports-of-prepared-meats-and-sausages-cy-2006-08-in-mt)

[Table 16. Russia: Imports of Live Pigs, CY 2006-08, Total Number, by
Countries
13](#table-16.-russia-imports-of-live-pigs-cy-2006-08-total-number-by-countries)

[Table 17. Russia: Import of Live Pigs, CY 2006-08, in Million USD, by
Countries
14](#table-17.-russia-import-of-live-pigs-cy-2006-08-in-million-usd-by-countries)

[Food Prices Are Skyrocketing 14](#food-prices-are-skyrocketing)

[Policy 15](#policy)

[Conference on Meat Imports Held to Discuss Meat Imports After 2009
16](#conference-on-meat-imports-held-to-discuss-meat-imports-after-2009)

[Hygienic Requirements for Food Additives Amended and Changed
16](#hygienic-requirements-for-food-additives-amended-and-changed)

[Other Relevant Reports 17](#other-relevant-reports)

**Data included in this report are not official USDA data. Official USDA
data are available at <http://www.fas.usda.gov/psdonlineonline>.**

# Executive Summary

Pork production is expected to increase 4 percent in 2009, due in most
part to large investments in swine production in 2007-08, higher
reproductive yields and government measures to curb imports. This growth
is directly related to investment credit subsidies as laid out by the
National Priority Project in agriculture (NPP) as well as continued
government imposition of import restricting policies. The pig crop is
expected to increase by 4.3 percent in 2009 and will equal 43.6 million
pigs. Beef production is expected to decrease 3 percent in 2009 as poor
cattle husbandry and generally negative profitability continues to spook
potential investors into this field. Production of beef in 2008 fell by
4 percent. In keeping with a long decline in the cattle sector, low
productivity and reproductive inefficiency are expected to decrease
cattle herds by 2 percent in 2009. The slower rate of decline in cattle
numbers compared to previous years is explained by increasing
investments into dairy and beef cattle breeding as part of the new
livestock policies under the State Program for Development of
Agriculture and Regulation of Food and Agricultural Markets in 2008-2012
which encourages cattle production and attempt to

Red meat imports reached 1.6 million MT in CY 2008 -- up 12.3 percent by
volume compared to 2007. The total value of these meat imports was
\$4.86 billion in 2008 compared to \$3.4 billion a year earlier. Retail
prices of meat and poultry increased in Russia by more than 23 percent
in 2008 while the average growth of all food prices increased by nearly
18 percent.

Russia and the United States have successfully negotiated health
protocols for live cattle, live pigs, live horses and bovine embryos in
2008 and just recently completed negotiations for animal hides and skins
and pet food. Veterinary certificates for beef and bovine semen have
already been negotiated.

# Overview

Private plots generate 45 percent of cattle, 40 percent of swine and 52
percent of sheep and goats in Russia. The Russian government approved a
new program that will succeed the National Priority Project in
agriculture (NPP) titled, "The State Program for Development of
Agriculture and Regulation of Food and Agricultural Markets in
2008-2012," that encourages pork and beef production and attempts to
address Russia's declining cattle numbers. This program includes
import-substitution policies designed to stimulate domestic livestock
production and to protect local producers.

In 2008, the economic environment for swine production was generally
favorable. Grain prices dropped significantly thanks to a high grain
harvest, which allowed farmers to increase their pig herds. Pork
producers have been expressing concern for years about sales after
implementation of the NPP as pork consumption is growing at a slower
rate than pork production. As a result, the pork sector has been
lobbying the Russian government to regulate imports in spite of the meat
TRQ agreement.

In 2008, more than 1.6 million MT of red meat was imported into Russia.
A 13-year decline in beef production has resulted in limited beef
availability in the Russian market leading to renewed spikes in prices.
In response, the Russian government has been force to take steps to
increase the availability of beef by decreasing duties on imported
products and is looking to Latin America for higher volumes. Feed stocks
decreased slightly in 2008 compared to the previous year but are
expected to increase in 2009 thanks to a record grain harvest.

The Russian pig crop is expected to increase by 4.3 percent in 2009,
while cattle herds are predicted to decrease by 3.5 percent. Some meat
market analysts predict that by 2012, as new and modernized pig farming
complexes reach planned capacity, pork production could reach 3.5 MMT --
up 75 percent from 2008 estimates.

According to the Russian Statistics Agency (Rosstat), approximately 1/3
of all Russian "large farms" are unprofitable. Many of these are
involved in livestock production. Small, inefficient producers are
uncompetitive and have already begun disappearing from the market.

The Russian veterinary service continues to play a decisive role in meat
import supply management. Since June 2008, the Russian veterinary
service has delisted over a hundred U.S. and EU pork and beef facilities
ostensibly for not meeting all Russian veterinary requirements.

# Production

Pork production is expected to increase 4 percent in 2009, due in most
part to large investments in swine production in 2007-08, higher
reproductive yields and government measures to curb imports. This growth
is directly related to the distribution of credit subsidies as laid out
by the National Priority Project in agriculture as well as government
imposition of import restricting policies. Before the economic crisis,
some meat market analysts predict that by 2012, as new and modernized
pig farming complexes reach planned capacity, pork production in Russia
would reach 3.5 MMT -- up 75 percent from 2008 estimates. Currently,
many of these "experts" admit that under the current economic
conditions, it will be difficult to maintain even the current 4 percent
forecast.

The pig crop is expected to increase by 4.3 percent in 2009 and will
equal 43.6 million pigs. Under the now expired NPP, 114 new pork
production facilities were built and are expected to raise domestic pork
production (live weight) by 950,000 MT in 2009 (in comparison to 2005
numbers). Many of these new pork facilities feature foreign equipment
and greater demand for imported pedigree hogs. The 2008 pig crop
forecast was increased slightly since the previous forecast due to
slighter better than expected reproductive yields. The forecast for pork
production was also revised and increased by 1.5 percent. This
represents a 6 percent increase overall in 2008 from normal slaughter
weights and higher reproductive yields.

Beef production is expected to decrease 3 percent in 2009 as poor cattle
husbandry and generally negative profitability continues to spook
potential investors into this field. Production of beef in 2008 fell by
4 percent.

In keeping with a long decline in the cattle sector, low productivity
and reproductive inefficiency are expected to decrease cattle herds by 2
percent in 2009. The slower rate of decline in cattle numbers compared
to previous years is explained by increasing investments into dairy and
beef cattle breeding as part of the new livestock policies under the
State Program for Development of Agriculture and Regulation of Food and
Agricultural Markets in 2008-2012 which encourages cattle production and
attempt to address Russia's declining cattle numbers. Nevertheless,
domestic cattle production is still cost prohibitive due to high
production costs, high feed conversion ratio, and expensive input
prices.

The average farmgate price for pork increased almost 20 percent compared
to the previous year while the average farmgate price for cattle
increased 8.5 percent. The largest price growth in the last decade
occurred from 1999-2002. The farmgate price growth seen in 2006-2008 was
not as dependent on world prices that fluctuated during that time span.

## Table 1. Russia: Average Farmgate Prices, in Rubles/MT, Live Weight

  ------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
                **1998**   **1999**   **2002**   **2006**   **2007**   **2008**   **2008 as
                                                                                  % of
                                                                                  2007**

  **Cattle**    4,933      11,729     26,017     39,235     41,762     45,641     8.5

  **Sheep and   3,675      8,672      19,858     30,356     33,647     37,571     9.5
  goats**                                                                         

  **Swine**     8,769      16,247     33,117     51,821     49,051     60,988     19.5

  **Poultry**   8,694      16,507     25,710     39,822     43,350     45,075     4

  **Milk**      1,272      3,054      3,633      7,214      8,409      11,016     24

  **Eggs**      445        858        978        1,651      1,974      2,471      20
  ------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------

Source: Rosstat

## 

## Table 2. Russia: Livestock Conversion Factors: Calculations of "Cow-Equivalent Units" 

  ------------------------------------ ----------------------------------
  **Type of Livestock**                **Conversion Factor**

  Adult cattle                         1.0

  Calves, more than 1 year old         0.50

  Calves, less than 1 year old         0.12

  Adult hogs                           0.50

  Piglets, more than 4 month old       0.25

  Piglets, less than 4 month old       0.05

  Adult sheep and goats                0.10

  Lambs                                0.06

  Adult horses                         1.10

  Colts, more than 12 month old        0.80

  Colts, less than 12 month old        0.25

  Poultry                              0.02

  Source: Manual "Statistics". A.F.    
  Grishina. 2003                       
  ------------------------------------ ----------------------------------

# 

# Consumption

Per capita pork consumption is expected to decrease in 2009 due to new
government measures aimed at limiting the amount of imported pork
shipped to Russia. In late 2008, Russia announced an increase to
out-of-quota pork imports that is expected to drastically cut imports
outside of the country allocated TRQ. Per capita beef consumption in
2009 will be flat with imports helping to maintain supplies as domestic
beef production continues to decline. If prices continue to grow at
current rates, pork and beef consumption is expected to fall even
further as consumers will switch to cheaper sources of protein such as
poultry meat and eggs. Moscow city government officials recently
announced that the "corrective actions" will be taken to combat rising
meat prices and keep consumption levels from decreasing any lower.
Details have not been released.

# Production, Supply and Demand Tables

## Table 3. Russia: Production, Supply and Demand of Live Cattle, in 1000 Head

  -------------- ----------- ------- ---------- ----------- ------- ---------- ----------- ------- ---------- ---------
  **Animal       2007                           2008                           2009                           
  Numbers Cattle                                                                                              
  Russia**                                                                                                    

                 2007                           2008                           2009                           

                 Market Year                    Market Year                    Market Year                    
                 Begin: Jan                     Begin: Jan                     Begin: Jan                     
                 2007                           2008                           2009                           

                 Annual Data         New Post   Annual Data         New Post   Annual Data         Jan        Unit of
                 Displayed                      Displayed                      Displayed                      Measure

                 ** **       ** **   **Data**   ** **       ** **   **Data**   ** **       ** **   **Data**   

  Total Cattle   19 000      18 695  19 000     18 370              18 370     17 800              17 900     (1000
  Beg Stocks                                                                                                  HEAD)

  Dairy Cows Beg 9 500       9 250   9 500      9 200               9 215      8 955               9 050      (1000
  Stocks                                                                                                      HEAD)

  Beef Cows Beg  0           0       0          0                   0          0                   0          (1000
  Stocks                                                                                                      HEAD)

  Production     7 310       7 110   7 310      7 100               7 100      6 970               6 970      (1000
  (Calf Crop)                                                                                                 HEAD)

  Intra-EU       0           0       0          0                   0          0                   0          (1000
  Imports                                                                                                     HEAD)

  Other Imports  75          60      75         60                  50         60                  40         (1000
                                                                                                              HEAD)

  Total Imports  75          60      75         60                  50         60                  40         (1000
                                                                                                              HEAD)

  Total Supply   26 385      25 865  26 385     25 530              25 520     24 830              24 910     (1000
                                                                                                              HEAD)

  Intra EU       0           0       0          0                   0          0                   0          (1000
  Exports                                                                                                     HEAD)

  Other Exports  1           5       1          0                   1          0                   1          (1000
                                                                                                              HEAD)

  Total Exports  1           5       1          0                   1          0                   1          (1000
                                                                                                              HEAD)

  Cow Slaughter  1 450       1 440   1 450      1 400               1 300      1 370               1 280      (1000
                                                                                                              HEAD)

  Calf Slaughter 0           0       0          0                   0          0                   0          (1000
                                                                                                              HEAD)

  Other          6 500       6 701   6 500      6 280               6 280      6 120               6 090      (1000
  Slaughter                                                                                                   HEAD)

  Total          7 950       8 141   7 950      7 680               7 580      7 490               7 370      (1000
  Slaughter                                                                                                   HEAD)

  Loss           64          80      64         50                  39         45                  39         (1000
                                                                                                              HEAD)

  Ending         18 370      17 639  18 370     17 800              17 900     17 295              17 500     (1000
  Inventories                                                                                                 HEAD)

  Total          26 385      25 865  26 385     25 530              25 520     24 830              24 910     (1000
  Distribution                                                                                                HEAD)
  -------------- ----------- ------- ---------- ----------- ------- ---------- ----------- ------- ---------- ---------

## Table 4. Russia: Production, Supply and Demand of Beef, and Veal, in 1000 MT

  -------------- ----------- ----- ---------- ----------- ------- ---------- ----------- ------- ----------
  **Meat, Beef   2007                         2008                           2009                
  and Veal                                                                                       
  Russia**                                                                                       

                 2007                         2008                           2009                

                 Market Year                  Market Year                    Market Year         
                 Begin: Jan                   Begin: Jan                     Begin: Jan          
                 2007                         2008                           2009                

                 Annual Data       New Post   Annual Data         New Post   Annual Data         Jan
                 Displayed                    Displayed                      Displayed           
                 in 1000 MT                   in 1000 MT                     in 1000 MT          

                                   **Data**   ** **       ** **   **Data**   ** **       ** **   **Data**

  Slaughter      7 950       8 141 7 950      7 680               7 580      7 490               7 370
  (Reference)                                                                                    

  Beginning      0           0     0          0                   0          0                   0
  Stocks                                                                                         

  Production     1 370       1 380 1 370      1 330               1 315      1 300               1 275

  Intra-EU       0           0     0          0                   0          0                   0
  Imports                                                                                        

  Other Imports  1 030       720   1 030      1 010               1 140      1 030               1 180

  Total Imports  1 030       720   1 030      1 010               1 140      1 030               1 180

  Total Supply   2 400       2 100 2 400      2 340               2 455      2 330               2 455

  Intra EU       0           0     0          0                   0          0                   0
  Exports                                                                                        

  Other Exports  8           5     8          12                  11         12                  12

  Total Exports  8           5     8          12                  11         12                  12

  Human Dom.     2 352       2 050 2 352      2 288               2 404      2 276               2 403
  Consumption                                                                                    

  Other Use,     40          45    40         40                  40         42                  40
  Losses                                                                                         

  Total Dom.     2 392       2 095 2 392      2 328               2 444      2 318               2 443
  Consumption                                                                                    

  Ending Stocks  0           0     0          0                   0          0                   0

  Total          2 400       2 100 2 400      2 340               2 455      2 330               2 455
  Distribution                                                                                   
  -------------- ----------- ----- ---------- ----------- ------- ---------- ----------- ------- ----------

## Table 5. Russia: Production, Supply and Demand of Live Pigs, in 1000 Head

  -------------- ----------- ------ ---------- ----------- ------- ---------- ----------- ------- ---------- ---------
  **Animal       2007                          2008                           2009                           
  Numbers, Swine                                                                                             
  Russia**                                                                                                   

                 2007                          2008                           2009                           

                 Market Year                   Market Year                    Market Year                    
                 Begin: Jan                    Begin: Jan                     Begin: Jan                     
                 2007                          2008                           2009                           

                 Annual Data        New Post   Annual Data         New Post   Annual Data         Jan        Unit of
                 Displayed                     Displayed                      Displayed                      Measure

                                    **Data**   ** **       ** **   **Data**   ** **       ** **   **Data**   

  Total          17 180      17 610 17 180     18 187              18 187     19 520              19 562     (1000
  Beginning                                                                                                  HEAD)
  Stocks                                                                                                     

  Sow Beginning  3 750       3 800  3 750      3 975               4 050      4 240               4 220      (1000
  Stocks                                                                                                     HEAD)

  Production     39 150      39 300 39 150     41 700              41 760     44 440              43 600     (1000
  (Pig Crop)                                                                                                 HEAD)

  Intra-EU       0           0      0          0                   0          0                   0          (1000
  Imports                                                                                                    HEAD)

  Other Imports  377         60     377        525                 770        525                 800        (1000
                                                                                                             HEAD)

  Total Imports  377         60     377        525                 770        525                 800        (1000
                                                                                                             HEAD)

  Total Supply   56 707      56 970 56 707     60 412              60 717     64 485              63 962     (1000
                                                                                                             HEAD)

  Intra EU       0           0      0          0                   0          0                   0          (1000
  Exports                                                                                                    HEAD)

  Other Exports  1           1      1          0                   1          0                   1          (1000
                                                                                                             HEAD)

  Total Exports  1           1      1          0                   1          0                   1          (1000
                                                                                                             HEAD)

  Sow Slaughter  0           0      0          0                   0          0                   0          (1000
                                                                                                             HEAD)

  Other          34 669      34 450 34 669     37 195              37 300     39 685              39 000     (1000
  Slaughter                                                                                                  HEAD)

  Total          34 669      34 450 34 669     37 195              37 300     39 685              39 000     (1000
  Slaughter                                                                                                  HEAD)

  Loss           3 850       3 679  3 850      3 697               3 850      3 800               3 799      (1000
                                                                                                             HEAD)

  Ending         18 187      18 840 18 187     19 520              19 562     21 000              21 162     (1000
  Inventories                                                                                                HEAD)

  Total          56 707      56 970 56 707     60 412              60 713     64 485              63 962     (1000
  Distribution                                                                                               HEAD)
  -------------- ----------- ------ ---------- ----------- ------- ---------- ----------- ------- ---------- ---------

##  Table 6. Russia: Production, Supply and Demand of Pork Meat, in 1000 MT

  -------------- ----------- ------- ---------- ----------- ------- ---------- ----------- ------- ----------
  **Meat, Swine                                                                                    
  Russia**                                                                                         

                 2007                           2008                           2009                

                 Market Year                    Market Year                    Market Year         
                 Begin: Jan                     Begin: Jan                     Begin: Jan          
                 2007                           2008                           2009                

                 Annual Data         New Post   Annual Data         New Post   Annual Data         Jan
                 Displayed                      Displayed                      Displayed           
                 in 1000 MT                     in 1000 MT                     in 1000 MT          

                                     **Data**   ** **       ** **   **Data**   ** **       ** **   **Data**

  Slaughter      34 669      34 450  34 669     37 195              37 300     39 685              39 000
  (Reference)                                                                                      

  Beginning      0           0       0          0                   0          0                   0
  Stocks                                                                                           

  Production     1 910       1 910   1 910      2 040               2 060      2 180               2 145

  Intra-EU       0           0       0          0                   0          0                   0
  Imports                                                                                          

  Other Imports  894         700     894        940                 1 050      960                 960

  Total Imports  894         700     894        940                 1 050      960                 960

  Total Supply   2 804       2 610   2 804      2 980               3 110      3 140               3 105

  Intra EU       0           0       0          0                   0          0                   0
  Exports                                                                                          

  Other Exports  1           1       1          1                   1          1                   1

  Total Exports  1           1       1          1                   1          1                   1

  Human Dom.     2 749       2 555   2 749      2 924               3 055      3 084               3 049
  Consumption                                                                                      

  Other Use,     54          54      54         55                  54         55                  55
  Losses                                                                                           

  Total Dom.     2 803       2 609   2 803      2 979               3 109      3 139               3 104
  Consumption                                                                                      

  Ending Stocks  0           0       0          0                   0          0                   0

  Total          2 804       2 610   2 804      2 980               3 110      3 140               3 105
  Distribution                                                                                     
  -------------- ----------- ------- ---------- ----------- ------- ---------- ----------- ------- ----------

# 

#  Stocks

Stocks of meat are sufficient for retail trade but are beginning to get
low for processing. Oversupply of beef took place in September 2008
after Russia lifted beef imports ban from Brazil. Wholesale prices for
beef decreased 20 percent as a result but retail prices stayed at the
same level.

Development of livestock production[^1] in Russia has increased demand
for protein feeds. Russia's imports of soybeans and soybean meal
subsequently skyrocketed, thereby suggesting that demand for biotech
feed products is also growing. Russia imported 215,259 MT of soybeans
from July 2007 through March 2008, compared with only 2,333 MT in the
same period of the preceding year.

## Table 7. Russia: Feed Stocks as of January 1, 2009, in MMT Feed Units[^2]

  ----------------------- -------------- ---------------- ----------------
                          CY 2007        CY 2008          CY 2009

  Feed Availability       17.6           17.4             18.3

  Including Feed Grain    5.8            5.8              6.8

  Per 1 Cow-Equivalent    10.9           10.6             11.2
  Units                                                   
  ----------------------- -------------- ---------------- ----------------

Source: Rosstat

There are no specific bans on importing biotech products.[^3] The
Federal Veterinary and Phytosanitary Surveillance Service (VPSS) of the
Ministry of Agriculture registers biotech feed-use crops. VPSS developed
and adopted new registration procedures[^4] reportedly similar to an
earlier protocol used in 2004. Registration for feed use still expires
after five years.

Prices of feed and feed ingredients increased rapidly in the autumn of
2007 and through spring 2008. As a result, the Ministry of Agriculture
issued on October 6, 2008, Order #437 titled, "Concerning Feed Subsidies
for the State Support of the Major Agricultural Industries." Swine
breeders will receive a compensation subsidy of 10 Rubles/kg of live
weight for pigs produced and shipped for slaughter from January--June
2009.

# Trade

Russian statistics indicate that red meat imports totaled more than 1.6
million MT in calendar year 2008. This figure increased 12.3 percent by
volume compared to 2007, according to the Russian Customs Service. The
total value of these meat imports reached \$4.86 billion in 2008
compared to \$3.40 billion a year earlier.

Russian frozen beef imports increased 10.99 percent in 2008 in relation
to 2007 while imports of fresh beef dropped 7.4 percent. In calendar
year 2008, beef imports totaled 810,730 MT -- roughly 50 percent of
which came from Brazil. Other significant suppliers of beef to Russia
include Uruguay, Paraguay, Argentina and Australia. In 2008, the Russian
veterinary service approved dozens of new beef facilities in South
America for export to Russia and reopened imports from Brazil.

Russian pork imports increased 18 percent in 2008 in relation to the
previous year. In calendar year 2008, fresh and frozen pork imports
totaled 790,955 MT -- roughly 31 percent of which came from Brazil.
Other major suppliers of pork to Russia include the United States (20
percent), Canada (13 percent) and Denmark (8.7 percent). Approximately
70 percent of total pork imports were boneless pork, 15 percent
carcasses, 9 percent bone-in cuts, 4 percent fresh cuts boneless and 2
percent fresh carcasses.

## Table 8. Russia: Meat Imports, CY 2006-2008, Quantity in MT 

+-----+-----------------+--------+---------+----------+-------------+
| HS  | Description     | CY     | CY 2007 | CY 2008  | \% Change   |
|     |                 | 2006   |         |          |             |
|     |                 |        |         |          | CY 07 to CY |
|     |                 |        |         |          | 08          |
+-----+-----------------+--------+---------+----------+-------------+
| All |                 | 3,1    | 3,      | 3        | 4.87        |
| M   |                 | 75,362 | 304,263 | ,465,019 |             |
| eat |                 |        |         |          |             |
| Pr  |                 |        |         |          |             |
| odu |                 |        |         |          |             |
| cts |                 |        |         |          |             |
| in  |                 |        |         |          |             |
| MT  |                 |        |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Beef, Frozen    | 6      | 712,812 | 791,159  | 10.99       |
| 202 |                 | 47,247 |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Pork,Fresh Or   | 6      | 671,739 | 790,955  | 17.75       |
| 203 | Frozen          | 25,657 |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Poultry Meat,   | 1,2    | 1,      | 1        | -5.42       |
| 207 | Offals          | 74,196 | 287,349 | ,217,587 |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Edible Animal   | 2      | 307,163 | 321,352  | 4.62        |
| 206 | Offal           | 96,247 |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Pig And Poultry | 2      | 247,211 | 267,096  | 8.04        |
| 209 | Fat             | 40,110 |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Beef            | 22,552 | 21,134  | 19,571   | -7.39       |
| 201 | Fresh/Chilled   |        |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Horses, Asses,  | 35,924 | 29,061  | 27,172   | -6.5        |
| 205 | Mules           |        |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Sheep Or Goats  | 14,898 | 11,432  | 17,225   | 50.68       |
| 204 |                 |        |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Other Frz Or    | 16,513 | 13,896  | 9,987    | -28.13      |
| 208 | Fresh           |        |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+
|  0  | Salted, Dried   | 2,018  | 2,468   | 2,916    | 18.17       |
| 210 | Etc             |        |         |          |             |
+-----+-----------------+--------+---------+----------+-------------+

Source: World Trade Atlas

## Table 9. Russia: Meat Imports, CY 2006-08, in Million USD 

+-----+------------------+----------+----------+--------+-------------+
| HS  | Description      | CY 2006  | CY 2007  | CY     | \% Change   |
|     |                  |          |          | 2008   |             |
|     |                  |          |          |        | 07/08       |
+-----+------------------+----------+----------+--------+-------------+
| All |                  | 4,494    | 5,096    | 7,186  | 41.1        |
| M   |                  |          |          |        |             |
| eat |                  |          |          |        |             |
| Pro |                  |          |          |        |             |
| duc |                  |          |          |        |             |
| ts; |                  |          |          |        |             |
| M   |                  |          |          |        |             |
| ill |                  |          |          |        |             |
| ion |                  |          |          |        |             |
| USD |                  |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Beef, Frozen     | 1,529    | 1,699    | 2,573  | 51.46       |
| 202 |                  |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Pork,Fresh Or    | 1,395    | 1,637    | 2,201  | 34.45       |
| 203 | Frozen           |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Poultry Meat,    | 922      | 1,052    | 1,339  | 27.35       |
| 207 | Offals           |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Edible Animal    | 295      | 330      | 422    | 27.67       |
| 206 | Offal            |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Pig And Poultry  | 168      | 196      | 412    | 110.71      |
| 209 | Fat              |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Beef             | 65       | 71       | 88     | 24.47       |
| 201 | Fresh/Chilled    |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Horses, Asses,   | 52       | 45       | 58     | 27.77       |
| 205 | Mules            |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Sheep Or Goats   | 28       | 25       | 55     | 120.76      |
| 204 |                  |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Other Frz Or     | 36       | 35       | 29     | -18.72      |
| 208 | Fresh            |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+
|  0  | Salted, Dried    | 4        | 7        | 10     | 40.47       |
| 210 | Etc              |          |          |        |             |
+-----+------------------+----------+----------+--------+-------------+

Source: World Trade Atlas

## Table 10. Russia: Frozen Beef Imports, HS 0202, CY 2006-08, in MT, by Countries 

+-----+----------------+------------+-----------+------------+--------+
| R   | Country        | CY 2006    | CY 2007   | CY 2008    | \%     |
| ank |                |            |           |            | Change |
|     |                |            |           |            |        |
|     |                |            |           |            | 08/07  |
+-----+----------------+------------+-----------+------------+--------+
|     | \--The         | 647,247    | 712,812   | 791,159    | 10.99  |
|     | World\--       |            |           |            |        |
+-----+----------------+------------+-----------+------------+--------+
| 1   | Brazil         | 259,805    | 455,581   | 403,851    | -11.35 |
+-----+----------------+------------+-----------+------------+--------+
| 2   | Uruguay        | 67,805     | 20,029    | 88,908     | 343.89 |
+-----+----------------+------------+-----------+------------+--------+
| 3   | Paraguay       | 86,249     | 62,755    | 83,280     | 32.71  |
+-----+----------------+------------+-----------+------------+--------+
| 4   | Argentina      | 151,388    | 112,385   | 69,366     | -38.28 |
+-----+----------------+------------+-----------+------------+--------+
| 5   | Australia      | 10,602     | 3,069     | 67,901     | 2      |
|     |                |            |           |            | 112.85 |
+-----+----------------+------------+-----------+------------+--------+
| 6   | United States  | 0          | 0         | 18,567     | 0      |
+-----+----------------+------------+-----------+------------+--------+
| 7   | Ukraine        | 2,303      | 33,233    | 16,712     | -49.71 |
+-----+----------------+------------+-----------+------------+--------+
| 8   | Germany        | 18,743     | 7,500     | 9,532      | 27.1   |
+-----+----------------+------------+-----------+------------+--------+
| 9   | Italy          | 5,978      | 2,557     | 6,948      | 171.72 |
+-----+----------------+------------+-----------+------------+--------+
| 10  | Poland         | 0          | 0         | 4,949      | 0      |
+-----+----------------+------------+-----------+------------+--------+

Source: World Trade Atlas

## Table 11. Russia: Imports of Frozen & Fresh Pork Imports, HS 0203, CY 2006-08, in MT, by Countries

+-----+----------------+------------+----------+-----------+--------+
| R   | Country        | CY 2006    | CY 2007  | CY 2008   | \%     |
| ank |                |            |          |           | Change |
|     |                |            |          |           |        |
|     |                |            |          |           | 08/07  |
+-----+----------------+------------+----------+-----------+--------+
|     | \--The         | 625,657    | 671,739  | 790,955   | 17.75  |
|     | World\--       |            |          |           |        |
+-----+----------------+------------+----------+-----------+--------+
| 1   | Brazil         | 233,250    | 282,198  | 238,696   | -15.42 |
+-----+----------------+------------+----------+-----------+--------+
| 2   | United States  | 68,424     | 75,130   | 159,377   | 112.14 |
+-----+----------------+------------+----------+-----------+--------+
| 3   | Canada         | 64,961     | 70,474   | 102,762   | 45.82  |
+-----+----------------+------------+----------+-----------+--------+
| 4   | Denmark        | 107,105    | 92,476   | 68,949    | -25.44 |
+-----+----------------+------------+----------+-----------+--------+
| 5   | Germany        | 43,687     | 43,534   | 68,528    | 57.41  |
+-----+----------------+------------+----------+-----------+--------+
| 6   | France         | 18,086     | 16,006   | 35,607    | 122.46 |
+-----+----------------+------------+----------+-----------+--------+
| 7   | Spain          | 13,624     | 26,428   | 32,134    | 21.59  |
+-----+----------------+------------+----------+-----------+--------+
| 8   | Netherlands    | 16,703     | 17,215   | 18,026    | 4.71   |
+-----+----------------+------------+----------+-----------+--------+
| 9   | Finland        | 16,388     | 14,464   | 17,791    | 23     |
+-----+----------------+------------+----------+-----------+--------+
| 10  | Belgium        | 14,335     | 14,654   | 14,428    | -1.54  |
+-----+----------------+------------+----------+-----------+--------+

Source: World Trade Atlas

## Table 12. Russia: Imports of Edible Animal Offals, HS 0206, CY 2006-08, in MT

+-------+----------------+----------+----------+-----------+---------+
| HS    | Description    | CY 2006  | CY 2007  | CY 2008   | \%      |
|       |                |          |          |           | Change  |
|       |                |          |          |           |         |
|       |                |          |          |           | 07/08   |
+-------+----------------+----------+----------+-----------+---------+
| All   |                | 3        | 3        | 3,465,019 | 4.87    |
| Meat  |                | ,175,362 | ,304,263 |           |         |
| Pro   |                |          |          |           |         |
| ducts |                |          |          |           |         |
| in MT |                |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+
| 0206  | Edible Animal  | 296,247  | 307,163  | 321,352   | 4.62    |
|       | Offals         |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+
|  0    | Frz Bovine     | 6,848    | 10,173   | 9,547     | -6.16   |
| 20621 | Tongues        |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+
|  0    | Frz Bovine     | 45,933   | 55,978   | 66,563    | 18.91   |
| 20622 | Livers         |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+
|  0    | Frz Other      | 27,691   | 30,799   | 30,153    | -2.1    |
| 20629 | Bovine         |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+
|  0    | Frz Swine      | 38,219   | 48,185   | 39,441    | -18.15  |
| 20641 | Liver          |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+
|  0    | Frz Swine      | 175,324  | 159,678  | 174,134   | 9.05    |
| 20649 | Other          |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+
|  0    | Frozen Other   | 2,232    | 2,331    | 1,475     | -36.72  |
| 20690 |                |          |          |           |         |
+-------+----------------+----------+----------+-----------+---------+

Source: World Trade Atlas

## Table 13. Russia: Imports of Edible Animal Offals, HS 0206, CY 2006-08, in MT, by Countries

<table style="width:100%;">
<colgroup>
<col style="width: 10%" />
<col style="width: 0%" />
<col style="width: 22%" />
<col style="width: 0%" />
<col style="width: 18%" />
<col style="width: 0%" />
<col style="width: 16%" />
<col style="width: 0%" />
<col style="width: 16%" />
<col style="width: 0%" />
<col style="width: 15%" />
</colgroup>
<tbody>
<tr class="odd">
<td>Rank</td>
<td colspan="2">Country</td>
<td colspan="2">CY 2006</td>
<td colspan="2">CY 2007</td>
<td colspan="2">CY 2008</td>
<td colspan="2"><p>% Change</p>
<p>07/08</p></td>
</tr>
<tr class="even">
<td colspan="2"></td>
<td colspan="2">--The World--</td>
<td colspan="2">296,247</td>
<td colspan="2">307,163</td>
<td colspan="2">321,352</td>
<td>4.62</td>
</tr>
<tr class="odd">
<td colspan="2">1</td>
<td colspan="2">Germany</td>
<td colspan="2">52,033</td>
<td colspan="2">49,885</td>
<td colspan="2">69,387</td>
<td>39.09</td>
</tr>
<tr class="even">
<td colspan="2">2</td>
<td colspan="2">United States</td>
<td colspan="2">16,859</td>
<td colspan="2">25,804</td>
<td colspan="2">52,543</td>
<td>103.62</td>
</tr>
<tr class="odd">
<td colspan="2">3</td>
<td colspan="2">Argentina</td>
<td colspan="2">25,592</td>
<td colspan="2">30,988</td>
<td colspan="2">27,193</td>
<td>-12.24</td>
</tr>
<tr class="even">
<td colspan="2">4</td>
<td colspan="2">Spain</td>
<td colspan="2">17,473</td>
<td colspan="2">20,862</td>
<td colspan="2">26,034</td>
<td>24.79</td>
</tr>
<tr class="odd">
<td colspan="2">5</td>
<td colspan="2">Australia</td>
<td colspan="2">19,900</td>
<td colspan="2">17,835</td>
<td colspan="2">20,199</td>
<td>13.26</td>
</tr>
<tr class="even">
<td colspan="2">6</td>
<td colspan="2">France</td>
<td colspan="2">23,084</td>
<td colspan="2">19,402</td>
<td colspan="2">19,558</td>
<td>0.81</td>
</tr>
<tr class="odd">
<td colspan="2">7</td>
<td colspan="2">Belgium</td>
<td colspan="2">13,783</td>
<td colspan="2">17,948</td>
<td colspan="2">17,176</td>
<td>-4.3</td>
</tr>
<tr class="even">
<td colspan="2">8</td>
<td colspan="2">Denmark</td>
<td colspan="2">47,610</td>
<td colspan="2">36,057</td>
<td colspan="2">16,678</td>
<td>-53.75</td>
</tr>
<tr class="odd">
<td colspan="2">9</td>
<td colspan="2">Netherlands</td>
<td colspan="2">13,524</td>
<td colspan="2">15,744</td>
<td colspan="2">13,995</td>
<td>-11.11</td>
</tr>
<tr class="even">
<td colspan="2">10</td>
<td colspan="2">Canada</td>
<td colspan="2">17,041</td>
<td colspan="2">13,730</td>
<td colspan="2">12,342</td>
<td>-10.11</td>
</tr>
</tbody>
</table>

Source: World Trade Atlas

##  

## Table 14. Russia: Imports of Pig and Poultry Fat, HS 0209, CY 2006-08, in MT, by Countries

+-----+-----------------+-----------+-----------+----------+----------+
| R   | Country         | CY 2006   | CY 2007   | CY 2008  | \%       |
| ank |                 |           |           |          | Change   |
|     |                 |           |           |          |          |
|     |                 |           |           |          | 07/08    |
+-----+-----------------+-----------+-----------+----------+----------+
| 0   | \--The World\-- | 240,110   | 247,211   | 267,096  | 8.04     |
+-----+-----------------+-----------+-----------+----------+----------+
| 1   | Germany         | 63,914    | 70,243    | 93,928   | 33.72    |
+-----+-----------------+-----------+-----------+----------+----------+
| 2   | Spain           | 40,242    | 41,709    | 51,528   | 23.54    |
+-----+-----------------+-----------+-----------+----------+----------+
| 3   | France          | 27,034    | 26,062    | 26,364   | 1.16     |
+-----+-----------------+-----------+-----------+----------+----------+
| 4   | Netherlands     | 12,533    | 18,089    | 21,817   | 20.61    |
+-----+-----------------+-----------+-----------+----------+----------+
| 5   | Denmark         | 32,695    | 36,280    | 20,495   | -43.51   |
+-----+-----------------+-----------+-----------+----------+----------+
| 6   | Canada          | 22,689    | 16,646    | 16,718   | 0.43     |
+-----+-----------------+-----------+-----------+----------+----------+
| 7   | Belgium         | 23,307    | 23,413    | 15,517   | -33.72   |
+-----+-----------------+-----------+-----------+----------+----------+
| 8   | Italy           | 57,11     | 4,658     | 7,554    | 62.19    |
+-----+-----------------+-----------+-----------+----------+----------+
| 9   | United States   | 2,895     | 1,845     | 3,704    | 100.76   |
+-----+-----------------+-----------+-----------+----------+----------+
| 10  | Austria         | 1,795     | 2,097     | 2,210    | 5.39     |
+-----+-----------------+-----------+-----------+----------+----------+

Source: World Trade Atlas

## Table 15. Russia: Imports of Prepared Meats and Sausages, CY 2006-08, in MT

+-----+-------------------------+--------+--------+--------+---------+
| HS  | Description             | CY     | CY     | CY     | \%      |
|     |                         | 2006   | 2007   | 2008   | Change  |
|     |                         |        |        |        |         |
|     |                         |        |        |        | 08/07   |
+-----+-------------------------+--------+--------+--------+---------+
| 16  | Prepared Meat, Fish,    | 1      | 1      | 1      | 7.21    |
|     | Etc                     | 14,692 | 18,353 | 26,890 |         |
+-----+-------------------------+--------+--------+--------+---------+
|  1  | Meat, Offals, Blood,    | 26,727 | 31,834 | 35,275 | 10.81   |
| 602 | Other                   |        |        |        |         |
+-----+-------------------------+--------+--------+--------+---------+
|  1  | Sausage, Similar        | 12,960 | 10,603 | 10,639 | 0.33    |
| 601 | Product Meat            |        |        |        |         |
+-----+-------------------------+--------+--------+--------+---------+

Source: World Trade Atlas

## 

## Table 16. Russia: Imports of Live Pigs, CY 2006-08, Total Number, by Countries

+-----+---------------+----------+--------------+-----------+---------+
| R   | Country       | CY 2006  | CY 2007      | CY 2008   | \%      |
| ank |               |          |              |           | Change  |
|     |               |          |              |           |         |
|     |               |          |              |           | 08/07   |
+-----+---------------+----------+--------------+-----------+---------+
| 0   | \--The        | 382,232  | 376,661      | 770,454   | 104.55  |
|     | World\--      |          |              |           |         |
+-----+---------------+----------+--------------+-----------+---------+
| 1   | Lithuania     | 44,198   | 161,027      | 351,998   | 118.6   |
+-----+---------------+----------+--------------+-----------+---------+
| 2   | Germany       | 0        | 45,666       | 180,868   | 296.07  |
+-----+---------------+----------+--------------+-----------+---------+
| 3   | Estonia       | 61,347   | 47,302       | 61,365    | 29.73   |
+-----+---------------+----------+--------------+-----------+---------+
| 4   | Poland        | 211,595  | 26,885       | 47,812    | 77.84   |
+-----+---------------+----------+--------------+-----------+---------+
| 5   | Denmark       | 27,159   | 20,600       | 35,318    | 71.45   |
+-----+---------------+----------+--------------+-----------+---------+
| 6   | Latvia        | 608      | 2,757        | 31,597    | 1       |
|     |               |          |              |           | ,046.06 |
+-----+---------------+----------+--------------+-----------+---------+
| 7   | Hungary       | 2,518    | 17,637       | 26,536    | 50.46   |
+-----+---------------+----------+--------------+-----------+---------+
| 8   | Czech         | 171      | 8,186        | 16,511    | 101.7   |
|     | Republic      |          |              |           |         |
+-----+---------------+----------+--------------+-----------+---------+
| 9   | Ireland       | 847      | 16,007       | 8,292     | -48.2   |
+-----+---------------+----------+--------------+-----------+---------+
| 10  | France        | 2,070    | 10,341       | 3,897     | -62.32  |
+-----+---------------+----------+--------------+-----------+---------+

Source: World Trade Atlas

## Table 17. Russia: Import of Live Pigs, CY 2006-08, in Million USD, by Countries

+----+---------------+----------+--------------+-----------+---------+
| Ra | Country       | CY 2006  | CY 2007      | CY 2008   | \%      |
| nk |               |          |              |           | Change  |
|    |               |          |              |           |         |
|    |               |          |              |           | 08/07   |
+----+---------------+----------+--------------+-----------+---------+
| 0  | \--The        | 74.22    | 102.63       | 171.19    | 66.8    |
|    | World\--      |          |              |           |         |
+----+---------------+----------+--------------+-----------+---------+
| 1  | Lithuania     | 8.22     | 27.66        | 64.64     | 133.73  |
+----+---------------+----------+--------------+-----------+---------+
| 2  | Germany       | 0        | 6.86         | 30.82     | 349.37  |
+----+---------------+----------+--------------+-----------+---------+
| 3  | Denmark       | 8.69     | 5.85         | 15.37     | 162.83  |
+----+---------------+----------+--------------+-----------+---------+
| 4  | Estonia       | 9.77     | 8.41         | 13.96     | 65.92   |
+----+---------------+----------+--------------+-----------+---------+
| 5  | Poland        | 32       | 12.24        | 12.64     | 3.21    |
+----+---------------+----------+--------------+-----------+---------+
| 6  | Ireland       | 0.55     | 9.09         | 6.88      | -24.28  |
+----+---------------+----------+--------------+-----------+---------+
| 7  | Latvia        | 0.10     | 0.44         | 6.87      | 1       |
|    |               |          |              |           | ,453.22 |
+----+---------------+----------+--------------+-----------+---------+
| 8  | Hungary       | 2.02     | 3.79         | 6.84      | 80.21   |
+----+---------------+----------+--------------+-----------+---------+
| 9  | France        | 2.44     | 9.58         | 4.33      | -54.79  |
+----+---------------+----------+--------------+-----------+---------+
| 10 | Canada        | 2.39     | 10.85        | 3.76      | -65.3   |
+----+---------------+----------+--------------+-----------+---------+

Source: World Trade Atlas

### Food Prices Are Skyrocketing 

The Russian Statistics Agency (Rosstat) announced that the annual
inflation rate hit 13.3 percent in 2008 (11.9 percent in 2007) with
growth in food prices as a primary contributor. This was the highest
annual inflation growth rate since 2002 when consumer prices increased
15.1 percent. Retail prices of meat and poultry increased in Russia by
more than 23 percent in 2008 while the average growth of all food prices
increased by nearly 18 percent. In January 2009 alone, food prices
jumped 2 percent leading many Russian government officials to publically
admit that rising food prices could threaten stability in the country.
According to some recent forecasts by Rosstat officials, prices for
imported food products and components from which food products are
produced in Russia could grow by up to 20 percent in 2009. Prominent
Russian government officials have called for steps to be taken that
would "destroy the monopoly that exists in Russian retail and food
processing sectors; stimulate domestic food production; and find
alternatives trading partners that could supply cheaper foods as quickly
as possible."

Representatives of grocery store chains stated in an industry meeting
held in early February 2009 that retail food prices could grow as much
as 25-45 percent by the end of 2009. According the retail sector
members, the causes for price growth include the devaluation of the
ruble, the large number of intermediaries in the production chain, and
measures taken by numerous regions within Russia that prevent product
from other regions to enter their markets. Another significant cause of
higher meat prices is linked to the Russian Customs Service's new list
of minimum declaration prices for custom clearance. The list was
prepared last summer when actual prices were high. Since then prices
have significantly decreased in exporting countries but importers are
not permitted to declare actual lower prices through Customs.

Rosstat figures demonstrate that disposable income grew just 2.7 percent
in 2008, after jumping 12.1 percent in 2007. Poultry and meat price
growth in 2008 were the most significant when compared to 2007 figures.

Increasing beef and pork prices will likely lead many Russian consumers
to substitute these items for other forms of protein such as poultry and
eggs assuming prices don't increase much higher than current prices.
Demand for pork meat has been dropping steadily over the last few months
and is significantly lower than for poultry meat. Some importers have
switched from purchasing expensive pork cuts to lower-priced pork
meat/offals which are growing more and more popular these days with
Russian consumers. With rising demand for poultry in 2009, prices are
expected to increase for this commodity both domestic and imported. At
the same time real income grew only by 2.7 percent in 2008, which is
expected to lower overall consumption of meat and poultry in 2009.

Ministry of Agriculture officials believes that high prices will improve
compatibility and profitability of domestic meat and poultry producers.
It previously accused imported meat of driving down farm gate pork
prices, and expressed the need for serious measures to limit meat
imports. A major cause of concern was the potential for weakening pork
and poultry prices to harm the ability of new producers financed under
the National Priority Project for agriculture to repay their loans.

# Policy

Russia's chief negotiator for World Trade Organization accession, Maksim
Medvedkov, remains optimistic that Russia may complete talks on joining
the World Trade Organization (WTO) by the end of 2009. Medvedkov also
stated in a recent press conference that he believes that progress is
being made in talks on Russia's accession. To date, Russia has signed
WTO protocols with all WTO members that wished to hold bilateral talks
excluding Georgia. In addition to bilateral talks, Russia has yet to
complete multilateral WTO negotiations although much progress has been
made during the last year. The next round of multilateral discussions
will take place in Geneva in March 2009.

Tariff-rate quotas on beef, pork and poultry meat imports for 2009 were
modified after Russian officials held consultations with major trading
partners in late 2008. The Russian government issued Resolution #918 in
December 2008 on temporary import duties for certain varieties of beef
and pork. Duties were sharply increased on imports of pork and poultry
meat that exceed the tariff rate quotas in 2009, but lowered the duty on
over quota beef imports. The over quota duty on chilled and frozen beef
was lowered on January 1 to 30 percent but not less than 0.30 Euros per
kilogram, pork imports exceeding the quota increased from 40 percent but
not less than 0.55 Euros per kilogram to 75 percent but no less than 1.5
Euros per kilogram. The duty on poultry imports exceeding the quota
increased to 95 percent but not less than 0.8 Euros per kilogram from
the previous rate of 40% but not less than 0.32 Euros per kilogram. Meat
market analysts are worried that the new measures may result in higher
domestic prices for pork and poultry products.

Pork and poultry import TRQ volumes were also changed. The quota amount
for pork imports increased to 531,900 MT from 502,200 MT by including
trimmings (29,700 MT) in the quota which were listed in a different
category in 2008. The share of U.S. pork quota allocation for 2009
increased to 100,000 MT from 50,700 tons. Negotiations will be conducted
with major trading partners to decide what mechanism will be established
for meat imports after 2009. Russian officials have not ruled out
extending the current tariff-rate quota system, but its future after
2009 still remains uncertain. Representatives of the Ministry of
Economic Development (MED) have stated in the past that Russia may
change its policy on meat imports after it joins the WTO. In 2010,
Russia has the option of switching from quotas to tariffs, which would
effectively increase the level of protection in the domestic meat
market. Commenting on proposals to eliminate the country allocation
principle for distributing meat quotas, an MED representative said that
this mechanism fully complies with WTO rules. He also added that this
may be source of friction at future negotiations.

State subsidies for agricultural production totaled 79.6 billion Rubles
(\$2.22 billion) in 2008. 82 new hog operations received subsidized
credit in 2008 while 80 existing hog facilities used credits to renovate
their operations. This increased production by 244,000 MT of hogs. First
Deputy Prime Minister Viktor Zubkov recently announced that hundreds of
meat and livestock projects that started in 2008 would be completed as
planned and that projects calling for construction of new livestock
farms are currently under consideration. Growth in domestic meat
production in the last three years outpaced growth in imports two to
one, he added. Zubkov stated in January 2009 that implementation of
livestock programs should be closely monitored by Russian government
officials given the situation of the financial markets. "Progress in
implementing new and existing investment projects to build poultry and
hog plants must be kept under permanent control by the Russian
government. Special attention should be paid to beef cattle breeding:
its genetics should be improved, share of cattle in total beef
production should be increased, and appropriate feeding should be
organized." Detailed discussions of the effectiveness of State support
and subsidized credit as well as issues regarding meat processing,
retail trade and customs will be considered at an expanded meeting of
regional leaders, sector associations and meat producers and processors
in March 2009.

### Conference on Meat Imports Held to Discuss Meat Imports After 2009

A conference titled, "Regime of Meat Imports Regulation for 2010 and
Following Years," took place in late January 2009 and was headed by
Minister of Agriculture Aleksey Gordeyev. Participants included
representatives of the Russian Meat Union, the Union of Meat Suppliers,
the Russian Poultry Union, the National Meat Association, the Russian
Union of Pork Producers, the Russian Union of Industrialists and
Entrepreneurs and the Association of the Russian Poultry Market
Operators joined the discussion on developing a new policy on meat and
poultry imports after 2009. Gordeyev noted the necessity for
"maintaining the current quota regime" which helps investors and market
players better forecast the situation with more precision. At the same
time Gordeyev believes that planning a TRQ distribution system should
include all meat varieties and their volumes and should not be longer
than a three-year period (2010-2012). "We need to establish such
proportion of domestic and imported meat products that would enable us
to resolve the issues of Russia's food security with consideration of
changing global economic situations and influences of the world
financial crisis," Gordeyev underlined. According to the Minister, the
"first fiddle" in ensuring such balance exists in Russia's meat market
"should be played by the business community which should share not only
the high level of professionalism but also responsibility for proposed
measures with us."

### Hygienic Requirements for Food Additives Amended and Changed

Russia approved amendments and changes to hygienic requirements for food
additives.[^5] The new requirements are stipulated in SanPiN
2.3.2.2364-08 Amendments and Changes #1 to the Sanitary and
Epidemiological Regulations SanPin 2.3.2.1293-03 Hygienic Requirements
for Use of Food Additives. The original requirements were registered at
the Ministry of Justice of Russia in 2003. The new hygienic requirements
for food additives became effective on August 1, 2008.

# Other Relevant Reports

RS9008 Economic Crisis Update

<http://www.fas.usda.gov/gainfiles/200902/146327327.pdf>

RS9001 New Procedures for Customs Clearance at Ports 

<http://www.fas.usda.gov/gainfiles/200901/146327088.pdf>

RS8096 Poultry and Meat Duties and Volumes Changed for 2009
<http://www.fas.usda.gov/gainfiles/200902/146327314.doc>

RS8095 Russia Changes Legislation and Structure of Animal Improvement
Industry 

<http://www.fas.usda.gov/gainfiles/200812/146306807.pdf>

RS8089 Russia: Doctrine of Food Security

<http://www.fas.usda.gov/gainfiles/200811/146306496.pdf>

RS8087 Meat and Poultry TRQ Announced for 2009

<http://www.fas.usda.gov/gainfiles/200811/146306457.doc>

RS8056 Biotechnology Annual

<http://www.fas.usda.gov/gainfiles/200807/146295243.doc>

RS8053 Amendments and Additions to SanPiN on Food Additives
<http://www.fas.usda.gov/gainfiles/200807/146295135.doc>

RS8027 Russia Distributed All of Beef and Pork TRQ

<http://www.fas.usda.gov/gainfiles/200804/146294276.doc>

RS8014 Livestock Semi-Annual

<http://www.fas.usda.gov/gainfiles/200803/146293870.pdf>

RS7093 25 Percent of 2008 Meat and Poultry Tariff Rate Quota Distributed

<http://www.fas.usda.gov/gainfiles/200712/146293295.doc>

RS7078 Registration Procedure for GMO Feeds

<http://www.fas.usda.gov/gainfiles/200711/146292888.doc>

RS7067 Livestock and Products Annual

<http://www.fas.usda.gov/gainfiles/200710/146292718.doc>

RS7020 Progress of the National Priority Project in Agriculture

<http://www.fas.usda.gov/gainfiles/200702/146280251.doc>

[^1]: Please see GAIN RS7020 and GAIN RS5086 for more information.

[^2]: Feed units are calculated in oat equivalence, where 1 feed unit =
    1 kilo of oats.

[^3]: Please see GAIN RS8056 for more information.

[^4]: Please see GAIN RS7078 for more information.

[^5]: Please see GAIN RS8053 for more information.