Wednesday, 5 December 2012

Russia - land of export opportunity

It can’t have escaped anyone’s attention that UK beef and lamb could soon be back on the menu in Russia, with exports potentially worth millions to the industry.

Defra's announcement that exports of beef and lamb to Russia are to resume was welcome news. The opportunity speaks for itself, with our estimates suggesting that the deal could be worth between £80 million and £115 million over three years. Russia is a major importer of beef – around 600,000 tonnes – and the long-term trend in Russian production is downward.

A year ago during the Prime Minister’s visit to Moscow, the issue of securing access for UK beef and lifting the remaining import restrictions was discussed, providing a good platform for finalising an agreement.

Of course, these things don’t happen overnight and a lot of effort has gone into making this happen. Earlier this year, for example, we hosted a delegation of Russian vets who spent a week with Defra’s export team visiting farms and processing facilities, working towards developing potential market access for the UK.

Beef exports are expected to begin from a limited number of plants in the new year, with lamb exports following in April. The potential for beef exports to Russia is enormous and the latest developments underline the importance of EBLEX’s work to improve market access for beef and lamb in non-EU countries. The opening of the Russian market is part of EBLEX’s strategy to secure new markets in order to optimise returns, in particular for products for which there is a low demand internally.

Exports also provide opportunities for improved carcase utilisation and a floor to the market, giving greater flexibility for processors to absorb variations in demand in the domestic market.

As we’ve said, the announcement about Russia is welcome news and the door which has been closed for 16 years is now open for the industry to seize new opportunities.