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Russia to increase poultry meat sales in China from zero to 55 thousand tons in 2019 while US-China trade war

Speakers of the business dialogue “Russia-China: Export of the poultry products” at the "Made in Russia" Forum, Moscow, Nov. 14, 2019. Photo by the Pan Pacific Agency

Pan Pacific Agency | COMMUICATION AGENCY FOR PACIFICA REGIONS

MOSCOW, Nov 14, 2019, Pan Pacific Agency. Increasing sales of agricultural products between Russia and China were discussed at the Russian international export forum “Made in Russia”, which was held in Moscow on this Thursday (Nov 14), Pan Pacific Agency reported.

Over the past four years, the export of agricultural products from Russia to China has increased by 2.3 times, Denis Kazannikov, project manager for the agricultural export support at the Russian Export Center, noted. In 2018 it was $2.5 billion, for 9 months of 2019 it increased by 27%, and by the end of this year it could reach $3 billion, he said.

“In the past year, we have made it possible for Russian producers of barley, soybean, rapeseed meal, and frozen poultry to enter the Chinese market. Negotiations are ongoing even now. The protocols on the admission of Russian beef are in a high degree of readiness,” Vyacheslav Serdyukov, Deputy trade representative of the Russian Federation to China, said.

According to him, a large number of Russian companies have already entered the Chinese market. “In 2016, we received about 3 thousand requests from Russian companies that would like to sell products in China. In 2018, there were only 1.3 thousand of such appeals. But there are positive changes in the portrait of Russian exporters. Most of them seriously study the Chinese market, hire Chinese-speaking employees, and study local standards,” he said.

“The problem remains the lack of understanding of the size of the Chinese market. Russian companies are striving to start selling their products in Beijing and Shanghai, although it would be possible to start moving to the Chinese market from smaller cities – the population in them is still extremely high compared to Russian cities: 5 million, 10 million people. Another problem: Russian exporters are in dire need of legal support in the Chinese market. We will develop this area of support for exporters in the nearest future,” Vyacheslav Serdyukov said.

The Russian agricultural watchdog Rosselkhoznadzor and the General customs administration of China signed protocols on reciprocal deliveries of frozen poultry meat a year ago, at the first China International Import Expo. Earlier supplies of poultry meat between the two countries were impossible. According to the results of 9 months, Russia exported 37 thousand tons of frozen poultry meat to China ($85 million), according to forecasts, by the end of the year, exports may reach 55 thousand tons, Sergey Lakhtyukhov, Director General of the National Union of Poultry Breeders, said.

According to the union’s estimates, more than half of exports are products of two large Russian enterprises, Resource agricultural group and the Cherkizovo group. “Manufacturers in Russia are closely following the development of the trade conflict between China and the United States. In any case, we expect that exports from Russia to China will increase”, he said.

Cherkizovo group began supplying poultry meat to China in the spring of 2019, Andrei Terekhin, export director of the group, said. “The demand for poultry meat in China is growing as the most affordable meat. We always had a question. China purchases poultry meat from Brazil, the USA, Europe. Why not in Russia, a neighboring country? Our proximity to China is a huge advantage to use,” he said.

“We are actively expanding our customers base. The first stage we went through. The second, more serious stage, is just beginning. Our customers are large Chinese corporations, such as COFCO. Supply volumes are growing. Over the past period, our export has reached $20 million. In the next two months we plan to double this amount, and next year, exports will exceed $50-60 million, as we plan,” he said. The feature of the Chinese market, he noted, is that the Chinese actively consume freeze-dried chicken legs. But Cherkizovo group strives to achieve sales of the entire range of poultry meat, including chicken legs, chicken breast, drumstick and thigh.

20 Russian producers compliant with the Chinese standards for frozen poultry, Xu Yun, general secretary of the Shanghai meat industry association’s special committee, said. China’s total meat demand is 900 billion tons (sixth in the world), and it is constantly growing, Cheng Xianhuan, commercial director at Singapore Chongqing Fortune Resource PTE, Ltd., added. High-quality Russian products can provide a third of this need, she noted. According to her, in China they want to diversify the supply of meat to the local market. Export of meat from Russia to China may increase by at least 10% in the nearest future.

Russian version of this article is available here.

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