The measure aims to promote and protect the domestic production of hatching eggs. Russia is grappling with a severe shortage of hatching eggs, a group of producers said at the government meeting with Russian Agriculture Minister Dmitry Patrushev. Import restrictions introduced after the highly pathogenic avian influenza (AI) outbreak deprived dozens of poultry farms of imported hatching eggs. It is estimated that the share of companies that depend on hatching eggs imported to Russia is close to 20%. The price of hatching eggs on the Russian market has almost doubled in recent months, reaching 30 rubles (US $ 0.35). Rising costs are pushing some farms below breakeven, forcing them to cut production, Russian poultry farmers said at the government meeting.

Russia is experiencing a severe shortage of hatching eggs, a group of producers said at the government meeting with Russian Agriculture Minister Dmitry Patrushev. Photo: Bart Nijs

In January 2021, poultry production in Russia fell by 6.4% compared to the same period last year, the Russian Union of Poultry Farmers Rosptitsesoyuz estimated. Rising costs are cited as the main reason for the drop. Rising costs are pushing up domestic prices for chicken meat and eggs, raising concerns among government officials. To avoid problems in the future, the Russian government plans to increase domestic production of hatching eggs. To encourage farmers to expand hatching egg production, the Ministry of Agriculture plans to offset part of the investment costs of new projects.

The planned taxation of imported eggs is aimed at pushing farmers to source hatching eggs from the domestic market. Currently, the import of hatching eggs is not subject to customs duty in Russia. Sergei Lakhtyukhov, president of the Russian Poultry Producers Union, estimated that Russia imported 700 million hatching eggs in 2020, or 15-20% of its global demand.

Reduced tax on Brazilian poultry

Russia could reduce taxes on poultry imports from Brazil if domestic price hikes continue to rise, the Russian state publication reported, citing government sources. This measure could be taken if other restrictive price solutions prove to be insufficient. Currently, the government is trying to contain rising prices in the domestic market by threatening poultry farmers with an investigation by the Federal Antimonopoly Service and by offering more soft loans for capacity upgrading. Within the Eurasian Economic Union, Russia’s poultry import quota for 2021 is set at 364,000 tonnes with zero tax for all countries. Outside the quota, the tax rises to 65%. There is no information on the rate that could be applied to Brazilian poultry imports.