Russian crisis hits EU meat export market

Date: 10/09/1998

By Myles Neligan

THE Russian crisis has deprived the EU of its largest export market for beef and pork overnight, prompting calls for the European Commission to take emergency measures to support beleaguered farmers and exporters.

Since the collapse of the Soviet Union, Russia has become one of the EU's largest farm trade partners, accounting for 40% of total beef exports and 32% of total pork exports.

The country is also a major buyer of the Union's dairy products.

The annual value of EU agricultural exports to Russia is estimated at 5.4 billion ecu, but European suppliers have suspended virtually all trade with their Russian partners since the rouble collapsed last month, because of fears that they will not be paid.

"The Russian crisis will have a very serious impact on our sector," said Jean-Luc Meriaux, secretary-general of the European Livestock and Meat Trading Union (UECBV). "Unless the situation stabilises very soon, some firms will be facing ruin."

The UECBV has asked the Commission to exercise flexibility in its day-to-day management of the EU beef and pigmeat markets in order to ease the pressure on Union farmers and exporters.

Meanwhile, member state governments this week called on the Commission to carry out a detailed assessment of the likely impact of the crisis.

Ireland, which is by far the EU's largest supplier of beef to the Russian market, has also requested an increase in the beef intervention price as a temporary relief measure.

"The Russian market is of critical importance to us. We have worked hard to establish ourselves there, and feel that unless we are able to maintain a presence through this crisis, we run the risk of losing out to competition from Australia," said an Irish diplomat.

The Commission says that it is monitoring the situation, and will intervene via its agricultural market management committees if necessary. Yet officials stress that there is little point drawing up a strategy for recovery until the situation in Russia has stabilised.

Aside from concern over the loss of a major outlet for their products, Union beef and pork suppliers now fear that the effective closure of the Russian market will lead to an increase in competition from the US, Australia and New Zealand in alternative markets such as eastern Europe or the Middle East.