Protests in Belarus could disrupt poultry trade with Russia

Since the re-election of Belarus president Lukashenko the country is in turmoil, with the risk of trade disruptions. Photo: ANP

The prolonged demonstrations against the official results of Presidential elections in Belarus could disrupt food trade with Russia, Russian magazine Agroinvestor warned.

Since the re-election of Belarus’ president Lukashenko the country is in turmoil, with the risk of trade disruptions. Photo: ANP

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Belarusian independent media reported strikes at some of Belarus’s largest factories, including the BelAZ truck plant in Zhodino, the Minsk Tractor Works, and others. The strikes are taking place exclusively within state-owned companies. This fact makes the poultry industry rather vulnerable, as the government operates most poultry farms and processing facilities in the country. However, so far, there were no reports regarding production halts at poultry farms or meat-processing plants.

Belarus companies would suffer from supply disruption more than the Russian buyers.”

Constantin Korneev, executive director of the Russian consulting agency Rincon Management, does see the potential of protest hindering food exports for Belarus to Russia. In 2019, Belarus exported 130,000 tons of poultry to Russia. However, as long as the Russian market is oversaturated with poultry, the export from Belarus could be easily replaced by Russian produce, he added. Korneev continues “Belarus companies would suffer from supply disruption more than the Russian buyers.”

Smuggling of embargoed products

Russia’s poultry supply might not be at stake, other products could become scarce. The unrest in Belarus can impact the smuggling of the European products, subjected to the 2014 food embargo, to Russia, said Dmitry Rylko, general director of the Russian Institute of agricultural market studies. Many products hit by the embargo do find their way into Russia via Belarus, although the exact volume of the illegal trade remains unknown.

New EU sanctions

Currently the protesters demand a change in leadership and in government structure, however, that will not benefit all. Future changes in the political system could hamper the competitiveness of products of the Belarus origin on the global market. According to Andrey Sizov, director of the Russian analytical agency SovEcon, Belarus agriculture seems to be very strong, but to a large extent this is possible due to huge amounts of state aid. At some point, the industry may go through painful reforms, he added. With the Lukashenko regime still in place, Belarus has to cope with new EU sanctions of which the extent is still unclear.