#4
Russia needs time to fill U.S. poultry gap
By Aleksandras Budrys
MOSCOW, March 21 (Reuters) - Russia will find no immediate substitute for currently banned poultry meat imports from the United States, Russian producers and importers said.
"We can increase output, but we will not be able to feed all Russia immediately," Andrei Lapkin, general director of the Yaroslavsky broiler plant in the central Russian Yaroslavl region told Reuters.
Nikolai Galitsky, executive director of the Petelinskaya poultry plant near Moscow, said: "To have sufficient poultry meat, we all must double our output, but I can't see how we can do it soon without strong government support."
Russia was the largest importer of U.S. poultry, taking nearly 40 percent of shipments from the United States, until Moscow imposed a ban from March 10, citing food safety concerns.
Last year Russia imported 1.36 million tonnes of poultry meat, including around one million tonnes from the United States, while domestic producers supplied only 860,000 tonnes, according to the Agriculture Ministry.
U.S. producers deny their chicken is unsafe and have lobbied hard to have the ban lifted, but more than a week of talks in Moscow have brought little progress so far. The trade row has coincided with U.S. tariffs on steel imports, although neither side has linked the two issues.
Importers of U.S. poultry said meat produced by Russia or imported from countries other than the United States could not compete with their own supply.
"Our meat is sold mainly in the regions where people can't afford buying more expensive Russian or Brazilian poultry," said Albert Davleyev, head of the U.S. Poultry and Egg Export Council office in Moscow.
BUSH'S LEGS
U.S. producers consider chicken breasts their main product on the domestic market. Chicken legs and thighs are treated essentially as by-products and are sold in Russia at prices below those of Russian poultry.
Cheap U.S. poultry, sold frozen from cartons at outdoor street markets, is known in Russia as "Bush's legs" because the trade began in the early 1990s under President George Bush.
Other countries will aim to boost exports to Russia, where their share of the market is tiny, with Brazilian poultry exports a meagre 34,000 tonnes in 2001.
Romania's farm ministry has advised producers to try to sell their 60,000 tonne poultry meat surplus to Russia.
Davleyev of the U.S. export group said he saw little chance of Russia producing sufficient poultry in the near future.
"Simple arithmetic shows that even if Russia keeps raising its poultry output by 15 percent a year, as in the last two years, it can meet its demand only sometime around 2010," he said.
"And thbat doesn't take into account other factors...like high profit taxes which, in our opinion, do not favour the development of the sector."
Russia has introduced a 24 percent profit tax on poultry plants from this year.
Russian producers say they want protection from cheap imports, but favour quotas and tariffs rather than a ban. The Agriculture Ministry has suggested raising import tariffs and imposing quotas, but such measures would take time.
The government pannel responsible for customs tariffs has not yet decided when it will examine a ministry proposal to raise the poultry import tariff to 30 percent from 25. Setting import quotas would require legislative changes as Russian law permits import quotas only for developing countries.
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