Russian President Vladimir Putin has announced his administration’s decision to embargo imported foodstuffs from the United States and various European nations. The move comes as a response to these countries’ sanctions against Russia for its role in the Ukrainian crisis. To fill the void, 89 Brazilian exporters are to supply the Russian market with meat and dairy products. The measure is expected to provide a major boost to Brazil’s economy.
“This is surprising,” says José Augusto Castro, president of the Brazilian Foreign Trade Association. “It’s never been so high. Russia has always been reluctant when it comes to our country, raising health concerns.” Castro expects Brazil’s exports to Russia to reach $500 million. “The most important thing for Brazilian exporters is to win over the market and keep it past this embargo year.”
Vice-president of the Brazilian Animal Protein Association Ricardo Santin says the deal shows that Brazil is an interesting international partner. “We can supply red meat to Russia for however long they need, whether that’s a year or more.” The pork and poultry industries alone are expected to bring in $200-300 million.
The most important thing for Brazilian exporters is to win over the market and keep it past this embargo year”
The poultry business is in the best position to win over the Russian market. “While it takes eight to ten months to raise a pig for consumption, a chicken only needs about 45 days,” Santin says. Now, 36 percent of Brazil’s pork and only four to five percent of its poultry production goes to Russia. “So there’s room for growth.”
Although this is good news for the international market, it may adversely affect Brazil’s domestic economy. If international demand increases, the price of red meat in Brazil could go up. “If we had a partner who was buying up large and unexpected amounts of meat, there would be an impact [on the domestic market],” Santin says. “But the production chain has enough stock. Although Brazilians won’t go without food, there will be an adjustment in prices.”
Russia is already Brazil’s largest pork and beef importer. In 2013, the European nation imported 303,000 tons of beef, worth $1.2 billion and 134,000 tons of pork, worth $412 million. Brazil exported farming and fishing goods – including coffee, sugar, and soy – worth $2.72 billion to Russia in that same year.
Translation: Dyane Jean François