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The Russian Poultry Market Has Been Hit By a Supply Deficit

Unirest, a managing company for KFC restaurants in Russia, reported that poultry market has been hit by a supply deficit. The company added that all businesses working with poultry meat are currently experiencing difficulty sourcing it, as written by Vladislav Vorotnikov, Eastern European Correspondent, October 30.

Russian association of restaurateurs and hoteliers confirmed that the poultry shortage exists. Igor Bukharov, head of the organisation, attributed it to a labour shortage on poultry farms, logistics supply disruptions and a hike in production costs, including those related to poultry feed.

Russian business newspaper Kommersant, citing an anonymous source in the poultry industry, assumed that by stepping into the public field, Unirest tried to “inflame the situation” in the poultry market. The source added that the company experiences difficulties because of strict requirements and a desire to sign long-term agreements with suppliers, under which they are not allowed to change prices following shifts in the market conjuncture.

However, there are reasons to believe that the shortage is real. Olga Zinovieva, head of the Russian food service Elementaree, disclosed that poultry meat suppliers now cut all shipments to their partners by 10-30% from the agreed level. Anderson, a prominent Russian restaurant chain, also complained about a lack of turkey, the price of which jumped from 340 roubles (US$3.4) per kg in July to 460 roubles (US$4.6) per kg in October 2023.

The Russian national union of poultry farmers explained that in the current market conditions, the emphasis is placed on meeting the demand of the Russian population for goods of social importance, such as poultry. As a result, the Russian poultry industry prioritises supply to retail chains.

Konstantin Korneev, director of Rincon Management, a Moscow-based think tank, also pointed out that a recent hike in poultry prices shaped up consumer preferences. Russians are now increasingly purchasing poultry carcasses instead of legs and wings since this is more affordable. As a result, the processing industry is tilting in a new direction, and poultry cuts traditionally in demand in the HoReCa segment appear to be in short supply.

The Russian Agricultural Ministry denied a shortage in the poultry market. In a statement to the Russian press, the Ministry said that the demand is being met in full, adding that Russian farms have engaged all available production capacities to expand output. By the end of the year, the industry is expected to increase production.

Source : Poultry World