Russia's meat industry to alter focus
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UTRECHT, The Netherlands – Declining domestic consumption growth of meat and newly acquired World Trade Organization membership will push Russia's meat industry toward a market dynamic that focuses on value and lower growth, according to a new report from Rabobank.
"Today's modern, fast-growing meat industry has been driven by increasing domestic meat consumption, attributed to the increasing wealth of Russian consumers," said Nan-Dirk Mulder, Rabobank Analyst. "Production growth has also been driven by the Russian government's agricultural program, implemented in 2003, which has boosted the country's agricultural self-sufficiency ambitions.
"Despite this, however, we expect meat industry growth to fall to significantly. As a member of WTO, Russia will no longer have as much opportunity to apply meat import quotas and tariffs and Russian players will see more competition from imports."
As Russia's appetite for meat softens over time, industry will need to look for alternative routes for growth, Rabobank reports. The biggest opportunities for future growth can be found in animal genetics and equipment. Investments that stabilize grain quality, efficiency and availability also present opportunities for the country's meat industry, according to Rabobank.