Russian poultry market braces for a price hike

As poultry companies plan to increase their prices by about 10% against the backdrop of the continuing avian influenza (AI) epidemic, supermarkets want to safeguard their margins.

The product volumes on the market have shrunk recently due to a seasonal factor and due to the mass AI spread in Southern Russia, in Krasnodar Krai, Stavropol Krai, and Rostov Oblast. From there, the disease began spreading into European Russia, Sergey Belyakov, chairman of the Russian retail companies association told a newspaper Izvestia.

Production costs are soaring

The companies are experiencing a significant decline in the poultry population, while production costs are soaring. So far, given the Russian population’s limited buying power, retailers never dared to increase their prices, Belyakov said. Even now, with margins thinning, it is very likely that retailers try to extend the price hike in a bid not to scare away their loyal customers. The Russian poultry industry’s production costs have jumped by nearly 6% in February, compared to January, the Russian union of poultry producers Rosptitsesoyuz estimated. In 2020, the production costs went up by 20% to 25%, but poultry companies constrained the rise in prices, bearing certain costs, Rosptitsesoyuz said.