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alt image

Russia 'ready' for further farm support measures

11 august 2010

Russia's government stands ready to give further support to farmers, in addition to the grain export ban and inventory release already announced, the country's biggest meat producer said. Cherkizovo said it welcomed the measures the government had announced so far to "mitigate the impact" of soaring grain prices which, according to analysis group SovEcon, have jumped 75% in Russia since the end of June. 

The export ban set to come into force this weekend, and the expected release of some 3m tonnes of grain from state stockpiles, "should lead to a stabilisation of prices in the domestic market", Sergei Mikhailov, the group's chief executive, said, dismissing current prices as "mostly speculative". 

However, this was unlikely to prove the limit of Moscow's willingness to support growers and livestock producers should the current measures fail to calm prices, Mr Mikhailov added. 

'Additional subsidy measures' 

"In the event of sustained extraordinary grain price increases, we reasonably anticipate that the government will intervene with additional subsidy measures for grain and livestock producers," he said. 

Indeed, without them, the country faced the prospect of rises in meat prices later this year as producers pass through increased costs, Mr Mikhailov added. 

Russia has made the support of the domestic livestock industry a priority of its agricultural policy, to cut down on huge reliance on foreign meat. The country ranks top among importers of chicken, and second in pork. 

Sales rise 

Cherkizovo cited lower chicken imports in the first half of this year, after Russia banned supplies from the US on health grounds, as key to an 8% rise to 99,860 tonnes in sales from its poultry division in the fist half of the year. 

Sales had continued to increase, helped by a good summer for barbecues, with prices "to remain relatively strong" for the rest of the year. 

Pork sales jumped 75% to 37.160 tonne, live weight, boosted by extra capacity, while sales of processed meats rose 8% to 66,200 tonnes. 

"Cherkizovo performed strongly across all segments," Mr Mikhailov said. 

The group's depositary receipts, a proxy for shares, stood 1.6% higher at $16.05 in morning trade oin London. 

Back to the news list

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