ANALYSIS - The South American meat sector is making a concerted effort to fill the gap in the Russian market left by the ban on imports from the EU, US, Canada, Australia and Norway.
Over the last week a trade mission from the Argentine Ministry of Agriculture, Livestock and Fisheries has been in Moscow in a bid to diversify and expand exports.
The mission was headed by the Secretary of Institutional Political and Agricultural Emergency Coordination, Javier Rodriguez.
The discussions were also attended by the Minister of Industry, Debora Giorgi, and Secretary of International Economic Relations, Ministry of Foreign Affairs, Ambassador Carlos Bianco.
On the Russian side, was Sergey Dankvert, director of the Federal Service for Veterinary and Phytosanitary Supervision of Russia (SENASA Argentine equivalent body) and Vice President of the Russian Chamber of Commerce.
The Argentine delegation demonstrated the performance of the sector over the last 10 years and future perspectives.
Mr Rodriguez also stressed the strategic importance of the relationship with Russia and the work that has been done since early this year in conjunction with the Ministry of Foreign Affairs through the Enhancement Programme and Export Diversification (PADEX).
He said that there are good prospects opening up for the export of poultry, dairy -particularly cheeses -, wine and quality beef.
A total of 113 Argentine firms were present, of which 88 belong to the food industry.
In addition, there were companies in the agricultural machinery sector, as well as pharmaceutical, oil and gascompanies.
The delegation also took part in the International Fair World Food Moscow, which is the most important in relation to food event held in region.
The fair was also a target for meat exporters from Brazil.
The Association of Brazilian Animal Protein, ABPA, said that it was an opportunity to fill the space left after the barriers imposed on the European Union, United States and Australia.
Last month, Russia was the largest importer of beef and pork produced in Brazil and the expectation is for an increase in volumes shipped to Russia from September.
ABPA said that the commercial relationship with Russia, however, is still considered unstable.
“Historically there is some caution in relation to Russia, because the industry does not know how long it can plan and count on the demand of the market,” said the vice president of the Brazilian Association of Swine Animal Protein (ABPA), Rui Vargas.
He said that in the past the industry has come to face oversupply and falling prices after raising investments with a focus on the Russian market.
The ABPA and the Brazilian Association of Meat Export Industry (Abiec) have been in Moscow alongside representatives of the Ministry of Agriculture for the World Food Moscow.
The goal, according to Mr Vargas, is to strengthen relations with the country.
“Participation in the fair will be important to strengthen and give greater solidity to partnerships with local importers, allowing more planning,” he said.
The president of Abiec, Antonio Jorge Camardelli, said it meat exports to Russia had been growing even before the embargo on imports from other countries.
He added that the trip to Russia comes at a strategic moment.
“The fair is important at this time because it is a space where you can establish perennial partnerships,” said Mr Camardelli.
In August, the Russian market was the main destination of exports of Brazilian beef.
According to the Abiec, the country exported 33.800 tons to Russia, an increase of 5.7 per cent compared with August 2013 In revenue, sales totalled $147.2 million, which represents an increase of 21 per cent.
Also last month, Brazil sold 14,500 tons of pork to Russia, with a revenue of $70.7 million - figures that, according to ABPA, represent a growth of 16.2 per cent and 82.5 per cent, respectively.
Exports to Moscow accounted for 35 per cent of total shipments in August.
“Russia has been increasing its stake in the Brazilian pork exports. The outlook is for a gradual increase.
“In 2013, turnout was just over 20 per cent and I believe we can reach 40 per cent at the end of this year,” Mr Vargas said.
For ABPA, also exports of chicken meat should benefit from the increased demand in Russia.
According to Mr Vargas, the Russian market consumes about nine per cent of sales outside of Brazil.
“Surely the segment can increase this share, but it is important to emphasise that Russia already meets much of its demand for poultry internally.”
Mr Camardelli did not forecast a possible increase in demand in Russia, but he said that as Brazil had the ability to supply product and together with the capacity, the country could fill the hole left by the lack of exports from the US and Australia.
Abiec ABPA expects the peak shipments to Moscow to be between October and November.