Page 121 - RusRPTDec21

In the context of lower global supply, grain prices continue to rally: Russia's FOB Novorossiysk is up 30% in September-October and now stands at $315/t; USA's FOB Fulf stands at $331/t (+21% y/y); FOB Ruen increased 33% y/y ($332/t).
According to the Ministry of Agriculture, export quotas are to remain in place for the next few seasons, while we do not see them as materially lower than available grain volumes, fairly reflecting the domestic supply-balance, as in the last two farming years. Those measures bring stabilisation to domestic prices and create grounds for the further consolidation of the export trade.
The Russian government is considering introducing volume-based duty-free imports of pork (up to 100k tonnes in 1H22) and beef (200k tonnes in 2022), according to Vedomosti.
The meat market in Russia is set to reach 11.2mnt in 2021F, we forecast, with per capita consumption of 75.6kg, implying a level slight ahead of the biologically required criterion.
Poultry and pork are the largest segments, with 44% and 37% of the total, respectively, in our model, and both see imports at less than 3% of the total, as the recent capacity additions by the industrial players lead to sector self-sufficiency.
Beef is a more premium type of meat and its share in overall consumption is 16% in 2021F, while imports stand at 10% of total.
The volumes for duty-free imports represent 2.5% and 11% of annual consumption in Russia for pork and beef, respectively.
Import tariffs are currently 25% in pork and 15% for beef under the quota of 570k tonnes (50% outside the quota).
Domestic prices rose 25% for pork and 10% for beef in 10mo21, mostly reflecting higher input and feeding costs and slightly lower supply due to animal diseases.
The current domestic prices are 7% below the global quotes for pork
121 RUSSIA Country Report December 2021 www.intellinews.com