Despite the impact of sanctions, Russian pork producers are experiencing increased sales to foreign customers, including countries outside the post-Soviet space, according to PigProgress.

Spectacular Growth

In the first half of 2023, Russia exported 74,000 tons of pork, which is 57% more than the previous year, estimated the export development center at the Russian Ministry of Agriculture.

Exports to Vietnam increased by 110%, reaching 38,000 tons. The export value skyrocketed by 160%, the agency said, without providing a specific figure.

Belarus, the largest sales market for the Russian pork industry in the CIS region, imported 20,000 tons of pork, which is 44% more than the previous year.

Reserves are also heading to new destinations. For example, Mongolia imported 3,300 tons of Russian pork, increasing purchases by 33%. Exports to Serbia grew by a factor of 6.6, reaching 3,200 tons, and to Hong Kong by 56%, reaching 3,000 tons.

Despite the Odds

To some extent, this dynamic can be attributed to the low base effect, but there is certainly more to it than that. Yuri Kovalev, the President of the Russian Union of Pork Producers, stated that in the first months of 2022, there was a decrease in export sales due to logistical disruptions in deliveries to foreign countries, exchange rate turbulence, and issues with payment for shipped goods.

In line with the recent deal concluded with grain from the Black Sea, the Russian government has consistently requested to reconnect Rosselhozbank to the SWIFT network, arguing that Western sanctions against the agricultural bank make it difficult for Russian farmers to supply food to the global market. The demand has not been met, which Russian authorities cited as one of the reasons for abandoning the agreement.

Sibagro, one of the largest pork exporters in Russia, commented that the increase in foreign sales was associated with high demand for Russian products abroad and the improved economic feasibility of exports.

The latter is partially attributed to the recent depreciation of the Russian ruble. In mid-2022, it was trading at multi-year highs of around 60 rubles/USD due to the imbalance in the trade balance. In recent months, the ruble has lost some value against the strong currency, pushing the exchange rate to 92 rubles/USD. This means that Russian farmers earn more rubles for selling pork to foreign customers.

The Positive Factor

This year, Russian pork exports are expected to reach 220,000 to 230,000 tons in physical terms and $0.5 billion in value, Kovalev said. Both figures are expected to set records.

Increased exports will help alleviate pressure on the domestic market, which was prepared for oversupply. Sibagro added that it intends to further expand exports, including to new markets in the Philippines, Thailand, and India.