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By John Helmer in Moscow

The Russian Trade and Inspection Agency (Rospotrebnadzor) has initiated new chlorine limits for poultry processing, commencing this month. The effect will be to cut imports well below the quota levels announced last month, especially of US-produced chicken.

The new Russian chlorine limit is 0.3 to 0.5 milligrams per litre, which is also the potable water standard. The same regulation exists for the European Union (EU) produced poultry, so imports from the EU will not be damaged, an RPN source told Fairplay.

Poultry imported from the US accounts for about 20% of the Russian market. But most of it does not meet the new requirements, an industry source told Fairplay. Irina Ostryakova of the Cherkizovo Group, one of the largest Russian poultry producers, said the new standard will “seriously tell on the US imports. Russian domestic suppliers of poultry like Cherkizovo are constantly raising production volumes and we hope the new limit will not cause deficit of poultry on the Russian market.”

Last month, a Russian government order cut the 2010 quota for imported poultry by 18% to 780,000 tonnes. US chicken imports were fixed at a new quota of 600,000 tonnes, down 20% on last year. “A significant reduction in poultry imports should support domestic poultry prices (on lower supply) and boost demand for domestically produced poultry,” reports Renaissance Capital analyst, Natasha Zagvozdina. “We remain positive on Cherkizovo (the largest domestic poultry producer) and Russian Grain (which recently acquired Agrosoyuz, a sizeable poultry producer in Bashkiria). Higher poultry prices and higher consumption of domestically produced poultry should support poultry revenue growth, and the profitability of poultry divisions at both companies.”

Chicken sales are expected to contribute about 45% of Cherkizovo’s sales revenues this year, while Russian Grain’s Agrosoyuz unit should contribute 19% to the group’s revenues. Cherkizovo’s broiler specialist on the company board is American, Samuel B. Lipman. He has set up two Russian poultry operations of his own — Golden Rooster in Lipetsk, and then Broiler Buduschego, a Russian subsidiary of his US company, Stromyn Breeders.

A leading American meat trader told Agriprods “this ban will be relatively short-lived and I do not doubt that the US quota will be filled in its entirety, but only after the dispute is resolved.” He predicts that Russian and US officials will have composed their differences and agreed on lifting of the ban by April 1, when the bulk of the 2010 poultry quotas will be distributed to importers.

“The science is on the American side, but the US is also in dispute with the EU over their overly restrictive regulation. All studies show that little or no chlorine residue remains on the product after treatment with chlorinated water. Although the Russian veterinary service thought the ban could be averted, the Chief Sanitary Officer Gennady Onischenko put his foot down, and refused to postpone his proposed measure further. It was originally scheduled to come into force on January 1, 2009 but was postponed for a year.”

Exporters and importers pin the blame for the chlorine ban on Onishchenko, who, one claims, was “offended that no one at the US Department of Agriculture took his ban threat seriously until the final months of 2009. Perhaps he hopes that by flexing his muscles a bit now, he will earn the respect, or fear, of the US and other countries, whose imports his agency is supposed to be controlling.”

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