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Russian Food Processing Sector Provides Opportunities for Exporters

20 May 2013

RUSSIA - A fall in Russia’s tariffs as mandated by its accession to the World Trade Organisation last year have so far failed to come into full effect.

However, Russia is one of the world’s largest import markets for food ingredients with the majority of raw materials and ingredients processed in Russia being imported.

And its WTO accession should facilitate the import of many types of raw materials and ingredients, particularly in relation to dairy, according to Emily Balsamo from the Moscow Office of Bord Bia – Irish Food Board.

Due to the long shelf life and cost effective nature of processed products, the food processing sector in Russia did not experience the same collapse as other sectors during the 2008 crisis according to a recent USDA report.

It continues to grow strongly, buoyed by urbanization, rising income levels, and an increasing taste for Western style food among Russians. Another important factor is the continuous modernization of Russian retail.

The food processing sector has garnered special attention by the Russian Government, and analysts speculate that it could soon become one of the highest yielding sectors in Russian agriculture.

The market grew by four per cent in 2012, yielding 967 billion rubles (€24 billion).

The sector employs 1.4 million Russians, with over 53,000 processing plants.

The number of processing plants has been growing by approximately 10 per cent annually since 2007, with the help of Russian government subsidies and support. Since 2007, the average annual growth of the ingredients and additives market (import and domestic) has been five to15 per cent.

Since 2009, production of processed consumer meat products has increased by 15 per cent, semi-finished meat products by 7.7 per cent, sausage by 8.7 per cent, and fruit and vegetable products such as packaged frozen goods by 8.4 per cent. The most popular source for ingredients is China, with 15.4 per cent of market share. Ireland currently holds a 4.5 per cent of market share, due to the strong presence of Irish dairy ingredients in Russian processing.

TheMeatSite News Desk

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