Reductions considered in meat imports

Move could hurt industry in US

By Catrina Stewart
Associated Press / August 28, 2008
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MOSCOW - Russia could cut poultry and pork import quotas by hundreds of thousands of tons, the country's agriculture minister said yesterday. The move could hit American producers hard and comes amid heightened tensions between Moscow and Washington over the war in ex-Soviet Georgia.

"It is time to change the quota regime and reduce imports, which have unfortunately built up in recent years," Alexei Gordeyev told reporters, according to the ITAR-Tass news agency.

He said domestic producers could make up the shortfall if imports were reduced.

Any substantial cuts would likely have a significant impact on US poultry producers, for whom Russia is the biggest market. Russians sometimes refer to US poultry imports as "Bush's legs," a reference to the frozen chicken shipped by the first Bush administration to Russia amid economic troubles following the 1991 Soviet collapse.

Earlier this week, Prime Minister Vladimir Putin backed proposals to freeze some of the agreements - particularly in the field of agriculture - relating to its efforts to join the 153-member World Trade Organization. Officials claim Moscow agreed to certain conditions with member countries in return for their help in fast-tracking Russia's entry.

"Agreements signed more than three years ago as part of the negotiations on WTO accession are unfortunately no longer in Russia's interests," said Gordeyev. "To put it mildly, we've been deceived."

Last month, Russian and US lobbyists agreed in principle to cutting poultry imports to Russia starting in 2009.

US producers supply nearly 75 percent of the total poultry import quota set by Russia, which stands at 1.2 million tons.

An analyst said Russia's timing was no coincidence.

"It has been on the agenda for some time," said Chris Weafer, chief strategist at UralSib bank in Moscow. ". . . It has just been accelerated as a result of current events."

American meat producers are increasingly looking to international markets as a way to offset domestic sluggishness, so any cuts could hurt them. They're grappling with high production costs and an oversupply of meat on the US market, which is keeping prices down. Analysts say American meat producers have to grow overseas - where a weak US dollar has made their products more attractive - to stay profitable.

Russian cuts could greatly affect Tyson Foods Inc., the world's largest meat company. Russia represented 17 percent of the $1.4 billion worth of chicken sales made internationally last year by the Springdale, Ark.-based company. Russia ranked second only behind Mexico in Tyson's top international markets for its poultry.

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