MOSCOW, December 1Chicken egg producers hope not to reduce production volumes in the coming years, but will not be able to ensure growth, since the industry is operating on the verge of profitability, the situation was aggravated by an increase in the key rate and expensive financing, the deputy general director of the Russian Poultry Union said at the conference «Agricultural Trends of Russia 2023-2024» («Rosptitsesoyuz») Elena Stepanova.
“We predict that there will be no decline in production this year, we will reach the level of last year. We hope the same stable situation will develop in 2024. Of course, increased demand requires an increase in production, but the situation in which the industry has developed in recent years Unfortunately, it did not create the potential for us that could provide this increase,” Stepanova said.
According to her, low profitability over the past few years — 5-7%, at best — 10% — “is not the level at which the industry can develop,” so in a situation with increased population demand for eggs, there were no additional resources. For example, in the first half of the year, the limits on preferential lending ended, and due to the increase in the key rate and expensive commercial loans, even launched projects were suspended.
Additionally, if they are implemented, the industry will be hit by the zeroing out of duties on egg imports for six months or the closure of exports. “Replenishment of resources through imports occurs only from Belarus; this is a long-established market. If we raise the issue of additional imports from third countries, we are categorically against it: we need to develop our own production and not unbalance the market, which has developed over the years,” Stepanova said.
In addition, there is a fairly stable export of eggs (1% of total production): for example, Russian enterprises in the Irkutsk and Chita regions, occupying a significant share in the Mongolia market, will suffer serious losses if the ban occurs — because it will be difficult to return after a six-month break, she noted it is, and supplies to other directions cannot be quickly established.
Commenting on the general rise in prices for eggs in the Russian Federation, Stepanova said that a seasonal increase occurs in the fall every year, but this was reinforced by increased demand from the population, and the price situation itself was “largely provoked by retail chains.” According to her, there is a problem both in concluding long-term contracts with retail — most manufacturers are still left without them — and in the pricing policy of chains. “Today, when increased demand has arisen, trade puts up prices for auction, and enterprises themselves are in shock — 160-170 rubles per ten! The situation worries us, we are trying to resolve it: it should fall into the normal course of pricing for such social products,” — emphasized the deputy head of the industry union.