Russia taps China for meat

Two subsidiaries of Henan Shuanghui Investment and Development Co have gained access to the Russian market, after its parent company — WH Group Ltd, the world's largest pork producer — acquired US pork producer Smithfield Foods Inc and bought a stake in Campofrio Food Group SA of Spain, the largest pan-European packaged meat products company, last year.

The two Heilongjiang-based companies — Wangkui Shuanghui Beidahuang Food Co and Heilongjiang Baoquanling Shuanghui Food Industry Co — got the official nod after their production facilities and products were examined and assessed by officials from Russia's meat products watchdog, the Federal Service for Veterinary and Phytosanitary Surveillance, in August, Shuanghui Development said on its website.

To widen its import market for meat, the Russian government agreed to import meat products from five Chinese suppliers by the end of August, indicating the nation has taken a flexible strategy to balance the supply and demand relationship, while the US and its European allies are trying to squeeze the country's trade space in the world market.

In the meantime, other Chinese meat suppliers such as Shandong-based Delisi Group and Shandong Jinluo Group are competing to get the rest of the mandate to export meat products to Russia.

Tian Zhihong, a professor of international trade of agricultural products at China Agricultural University in Beijing, said Russia's decision to choose the two subsidiaries of Shuanghui Development makes sense as Heilongjiang borders Russia and has a well-developed agricultural industry.

In addition, it also offers advantages like shortened logistics timing and cooler climate conditions that make it easier to supply meat products to Russia.

Russia's Far East region used to rely heavily on meat supplies from the US and Canada. The change in meat suppliers comes after Moscow imposed a one-year ban in August on a number of agricultural products, including meat, fish, poultry, fruit, vegetables, wine and dairy products from the US, other member nations of the European Union, Norway, Canada and Australia in retaliation for the economic sanctions imposed against it by the West.

China is the world's biggest pork producer and has a well-developed pork processing industry. However, the trade volumes of China's pork products are not that significant. China imported 580,000 metric tons of pork products and sold 73,000 metric tons of pork to foreign markets in 2013.

Li Guoxiang, deputy director of the Rural Development Institute at the Chinese Academy of Social Sciences, said: "Another concern for Russia is the cases of African swine fever that have been detected in several European countries such as Lithuania, Estonia, Latvia and Ukraine, which causes fever with high mortality rates in pigs and directly contaminates meat and related products."

China has not exported pork products to Russia before, and its exports have mostly been small shipments to nations like Belarus, Armenia and Moldova.

According to Li, though China's initial pork export volume will not be huge, it will be a meaningful start to expand the nation's global presence.

"WH Group, the parent company of Shuanghui Development, is proficient in producing sausages, ham and pork luncheon meat, especially after it acquired US pork producer Smithfield Foods Inc in 2013. These products are extremely popular in Russia and can help further diversify export channels for Chinese meat products in the new market," said Li.

The Luohe-based WH Group recorded sales of more than $20 billion in 2013, data from the company showed.