Economy & Finance

Agriculture: Lithuanian meat processing companies complain that it is difficult to regain their market share in Russia

In lithuanian  agriculture, performance of different segments continued varying to a large extent.

In January–November 2013, purchasing of pigs increased by 20.2 per cent, eggs 15.6 per cent, birds by 10.6 per cent, sheep and goats by 1.0 per cent on an annual basis, but purchasing of milk decreased by 2.1 per cent and cattle by 8.2 per cent. Purchasing of sugar beets increased by 12.7 per cent, fruit and berries by 15.0 per cent, vegetables by 1.6 per cent while purchasing of potatoes declined by 1.2 per cent, cereals by 5.2 per cent and rape seeds by 17.1 per cent.

Large variation was registered in prices of plant and animal production. In November 2013, prices of fruit and berries increased by 75.7 per cent, milk by 24.5 per cent, sugar beets by 12.2 per cent, potatoes by 41.6 per cent, vegetables by 5.3 per cent. On the other hand, price of rape seeds decreased by 24.6 per cent, eggs by 22.6 per cent, wheat by 22.5 per cent, cattle by 14.6 per cent, pigs by 8.0 per cent and birds by 4.8 per cent.

Lithuanian meat processing companies complain that it is difficult to regain their market share in Russia which was lost due to trade restrictions. Despite the fact that Russia has allowed imports of chilled beef roughly three months ago, reaching previous trade volumes is challenging. Previous close contacts with purchasers have weakened and regulatory environment has tightened. During the period of trade restrictions, purchasing prices have dropped by as much as 30 per cent. South American exporters have entered the market and even a large drop in the price of Lithuanian meat does not guarantee adequate terms of competitiveness.

According to animal breeders, currently meat purchasing price does not cover production costs and such a situation will continue until farmers start cooperating and increase their bargaining power with processing companies.


Source: SEB


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