Imported Pigs Crowd Out Local Pork

RUSSIA - The country's pork producers are facing a growing challenge from importers of live pigs who are using a loophole in customs regulations to avoid quotas and higher tariffs.
calendar icon 2 July 2009
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In May alone, 110,000 live pigs were brought into Russia for slaughter, Mikhail Popov, general director of the Ostankino Meat processing plant, said Tuesday at a meeting of the National Pork Producer's Union.

About 8,250 tons of live pork is imported into the country every month, which comes out to almost 100,000 tons of pork annually, or 19 per cent of the 2009 pork import quota of 531,000 tons, Mr Popov said.

While pork imports are normally subject to a 15 per cent duty, those in excess of the quota are subject to a tariff of 40 per cent to 75 per cent of their customs value.

Live pigs, however, are only subject to a 5 per cent import tax, Popov said.

Sales of all types of meat fell by 16.5 per cent to $933 million for the period between January and April, compared with the same period in 2008.

Importers first attempted to circumvent the quota with live pigs in 2004, when 55,000 pigs were brought into the country in the first eight months of the year, compared with only 25,000 in all of 2003.

Companies said at the time that importing a live pig from Poland and slaughtering it in Russia was 20 per cent cheaper than buying frozen Russian pork.

Meat producers did not see the imports as a threat, believing that the number of pigs brought into the country would be kept in check by a lack of modern slaughtering methods.

In the last three years, however, Russia's slaughterhouses have become 30 per cent more efficient, said Musheg Mamikonyan, president of the Meat Union.

By 2008, pork imports rose to 603,000 head of swine, and the first five months of this year have shown that this trend is continuing, said Alexander Nikitin, head of the Miratorg meat processing plant.

Up to 367,000 pigs have already been imported this year, Nikitin said, and the main company importing them, Agrogalimeks, was doing so in 2004 as well.

Agrogalimeks was not available for comment, reports The Moscow

The difference in price between domestic and imported pigs has not changed, said Sergei Yushin, head of the National Meat Association.

The average cost of a live Russian pig is 1.70 euros ($2.40) per kilogram, compared with up to 1.4 euros per kilogram -- including transportation -- for imported pigs.

Nikitin said pork producers have already tried to convince the government to "plug the hole," without success. "The government alluded to WTO talks," he said.

In 2007, then-Agriculture Minister Alexei Gordeyev, now governor of the Voronezh region, proposed raising the tariff on live pigs up to 35 per cent, but a final decision on the matter was never made.

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