World meat industry news

Russia is one of the key suppliers of fertilizers to the Brazilian market, and in turn would like to import more beef - for now, the Russian Federation’s share in trade turnover between the countries is higher. To achieve balance, it is necessary to change the format of logistics services and the payment system, representatives of departments and businesses said during the St. Petersburg International Economic Forum.

Russia has become an important partner for Brazil, positive dynamics in investment cooperation between both countries has been observed since 2021, said Ambassador Extraordinary and Plenipotentiary of Brazil to Russia Rodrigo de Lima Baena Soares, highlighting, in particular, significant volumes of fertilizer supplies. In his opinion, trade turnover between the countries in 2024 could reach a new record of $12 billion – against about $11 billion in 2023, according to his estimate. Meanwhile, the volume of purchases of Russian products by Brazil amounted to about $3 billion.

Deputy Minister of Economic Development of the Russian Federation Vladimir Ilyichev also reported a positive trend in trade turnover: according to the ministry, in the first quarter, exports of Russian products to Brazil more than doubled, but at the same time, supplies of products from Brazil to Russia are still declining. In his opinion, it is necessary to solve logistics issues, building them in terms of new realities, to look for more stable options; In addition, it would be useful to intensify interaction at the level of business associations.

Russia is now interested in increasing imports of traditional Brazilian goods, such as soy and beef, but sees even greater potential for meat. “The Russian market, to a certain extent, needs these supplies - we see a niche for imports that will help maintain price changes for these goods at a normal level. Taking into account what is happening in the market, primarily for beef, our Brazilian colleagues could increase these supplies,” said the deputy minister.

But in general, the dynamics of the first quarter allow us to look with great optimism at the results of 2024, which could show a new historical record for the volume of bilateral trade, says Andrei Guryev, president of the Russian Association of Fertilizer Manufacturers.

“In 2023, Russian-Brazilian trade remained at the record level of 2022 and amounted to $8.4 billion. In addition to the traditional driver of expanding bilateral trade turnover in the agro-industrial complex, today we see the highest record figures in the supply of petroleum products to Brazil from Russia,” he said.

According to Andrey Guryev, the main goods exported to Brazil from Russia in 2023 are oil, coal, gas (56% share) and mineral fertilizers (35%), the main imported goods from Brazil are oilseeds and fruits (54%), meat and edible meat by-products (22%).

WHAT COMPANIES SAY

General Director of EuroChem MCC Oleg Shiryaev says that the company supplied 8 million tons of fertilizers to Brazil in 2023, approximately 20% of consumption in this country, but at the same time faced a number of new challenges limiting business growth.

Firstly, financing is attracted from the company’s own capital, “and given the turnover, which is measured in billions of dollars, this is an extremely serious limitation for further business expansion,” and secondly, financial flows must operate stably between countries.

“Unfortunately, we are only on the way to forming such commodity flows, so we need to use those that have already been formed, and here we cannot do without connecting China’s commodity supply chains into the triangle. Therefore, we all need to look at how our banking system, which serves our entire flow of goods, can be taught to work, including using the yuan,” says the general director of Eurochem.

We need the work of the so-called logistics triangle - Brazil, China, Russia. According to Oleg Shiryaev, such triangulation of supplies would support the natural flow of both goods and money, allowing all countries to effectively interact within the BRICS framework.

In turn, Alexander Iodchin, First Deputy General Director for Strategy and Development LLC Management Company Delo, believes that it is necessary to build more complex routes, taking into account the BRICS countries and other friendly countries.

He also pointed to the imbalance of cargo flows between the Russian Federation and Brazil: for example, in 2023, Russian exports to Brazil amounted to about 22 million tons, and in the opposite direction - only about 1.5 million tons. In addition, it is impossible to ensure uniform loading of ships in both directions: mainly containerized cargo goes from Brazil to Russia, and back in bulk or in bulk.

Thus, another direction is to reduce the cost of logistics services. “I would like to draw your attention to the fact that here, together with colleagues from the Ministry of Industry and Trade, we are working on a system of subsidizing transportation from the north-west of Russia to Latin America, in particular to Brazil. I am confident that these support measures will allow us to increase the flow of goods and cargo turnover between our countries. In any case, all current problems can be solved,” concluded Alexander Iodchin.

The CEO of one of the largest beef producers in Brazil, Minerva Foods, Fernando Galletti da Queiroz, also drew attention to the fact that logistics is one of the problems that needs to be solved when it comes to supplies to Russia. According to him, the company can supply “huge amounts of dry meat” to Russia, but now logistics problems and financial problems are the main obstacles to the development of supplies from the private sector of both countries.