Russia, once a dominant player in the global beef trade, has withdrawn considerably from global markets, dubbing the country as a ‘sleeping giant’ in the world beef trade complex. Previously responsible for around 16 per cent of global beef imports (or around one million tonnes cwe), the enforcement of import bans, a slower economy and weaker currency have seen imports reduce dramatically. Meanwhile, domestic production has not made up the shortfall, accounting for around 60 per cent of Russian beef demand, according to Rabobank’s latest Global Beef Quarterly.
While Rabobank believes beef imports into Russia have the potential to return to pre-2015 levels, it remains contingent on the removal of import bans, the recovery of the oil price and an appreciation of the rouble.
“And, this is not expected to change in the short-term,” says Rabobank animal proteins analyst Matt Costello, “given the continuing bleak economic outlook and the recent extension of the import bans until the end of 2017.
“However Russia’s potential remains significant and you only have to look at their previous import requirements to realise how they can fundamentally change the global beef trade complex.”
The Global Beef Quarterly Q3 2016 also covers the reopening of the US/Brazil beef trade, China’s slowing economy, the first 10,000 tonnes of Indian bovine meat arriving in Indonesia and that it expects Australian cattle prices to ease slightly.
In New Zealand cattle prices remained relatively unchanged in Q3, but Rabobank’s outlook for New Zealand beef prices is that they will come under pressure in coming months. This is largely due to the high NZD/USD exchange rate. Weaker market pricing in the US is also expected to keep a lid on New Zealand cattle prices for the remainder of 2016.