Veteran Russian meat firms reap rewards of food import ban
By Polina Devitt
MOSCOW Nov 27 (Reuters) - Established Russian meat producers are reaping the rewards of Moscow's import ban on Western food as newcomers find it difficult to gain a foothold in what some see as a risky market, the head of Russia's National Meat Association said on Thursday.
Sergei Yushin told an agricultural conference the ban introduced in August in retaliation to Western sanctions over Ukraine combined with government support and higher prices were boosting producers who had invested in output over the years.
Newcomers, including those importers which are not banned and might like to invest in production, were nervous about entering a market which could change in a year, when the import restriction is due to be removed.
Fears about higher prices for feedstock, a weaker rouble and higher interest rates on loans were also deterring investment, he said. "And the main thing is how long will the embargo last."
Meat producers have done well in recent years in Russia, where meat consumption has increased by 84 percent since 2000 to 74 kg a year, according to Yushin's estimate.
Earlier on Thursday, farming conglomerate Rusagro said it was on track to post record core earnings this year after third-quarter net income came in three times higher, year-on-year, to 6.6 billion roubles ($138 million).
It followed Cherkizovo, also a meat producer, which saw net profit rise eight-fold in the third quarter, year-on-year.
Rusagro said sales of its meat sector had been boosted by higher pork prices and pork sales volumes. It also benefited from sugar and oil segments. But both may see growth capped by a weaker rouble. Continuación...