Russia-China poultry trade perks up
Russia’s largest poultry producer, Cherkizovo, has sent the first batch of poultry meat to China by rail, exploring a promising logistics opportunity. Meanwhile, Russian poultry processors ring the alarm bell as supplies in the opposite direction also rise.
Cherkizovo has sent the first batch of 50 tonnes of chicken feet to China in railway refrigerator containers, the company said in a statement on 29 April. This route is expected to become an alternative to sea transportation as the delivery time is reduced from 45 to only 15 days, Cherkizovo stated.
Growing shipments
Starting from June, Cherkizovo plans to dispatch, on average, 3 trains with chicken products to China per month, and the number of containers in each should grow from 30 in the first shipment to 41. “So far, these are test shipments, but the company is certainly interested in developing direct rail shipments to China as an alternative to more complex and lengthy logistics using the sea route,” Cherkizovo said, adding that trains allow the company to deliver products directly to its customers.
China is the primary sales market for Cherkizovo. In 2022, the company sold 40,000 tonnes of chicken and turkey products into China. This year, rail delivery should account for roughly 10% of all shipments, the company forecasted.
The company, however, has not disclosed any information about the delivery costs. The export of products by rail to China from European Russia is typically more expensive than supply by sea. It is also associated with logistics constraints in the Trans-Siberian Railways.
A 2-way street
On the other hand, Russian poultry farmers express concerns that China to Russia’s poultry export is also on the rise. Sergey Lakhtyukhov, general director of the Russian national union of poultry producers, told the local press that a steady increase in imports from China seems like a “wake-up call” for the industry. He added that if this trend continues, it may drive down prices in the Russian poultry market and negatively impact the industry’s investment attractiveness.
Russian agricultural market analysts share these fears. Leonid Kholod, a local expert, claimed that these concerns, in his opinion, are well founded since the inflow of cheap poultry from China could not just hurt the average profitability in the industry but also spark bankruptcies among Russian poultry farmers. He explained that the situation looks threatening since a share of the farmers in Russia are already on the edge.
