Background Banner

Changes Announced in Russia’s Tariff Rate Quotas

Published: Dec 18, 2009

Changes Announced in Russia’s Tariff Rate Quotas

USTR has confirmed that the Russian Ministry of Economic Development will implement the new tariff rate quota (TRQ) volumes that were included in the draft decree released in October.

For the United States, the most significant change from 2009 is a reduction in the pork TRQ from the current 2009 volume of 100,000 metric tons to 57,500 metric tons in 2010 and 2011, and 51,600 metric tons in 2012. Exports within the TRQ are subject to a 15 percent duty, with much higher duties assessed on over-quota exports. The out-of-quota rate was 60 percent in 2008 and was increased to 75 percent (but not less than 1.5 euro/kg) in 2009.

Even though the volume of the U.S. TRQ is being reduced by 42 percent, the higher out-of-quota rate is expected to be applied in 2010. Out-of-quota exports are achievable, however, if the economic climate is favorable. For example, U.S. pork exports to Russia totaled 150,407 metric tons in 2008 when the U.S. had only a 49,800 metric ton TRQ. 

Although official numbers are not yet available, Russia’s global pork TRQ is expected to total 472,100 metric tons in 2010, with the largest portion (48 percent or 225,000 metric tons) allocated to the EU and 189,600 metric tons to other countries. This compares to the current global TRQ volume of 531,900 metric tons, in which with the EU controls 253,400 metric tons and other countries hold 177,500 metric tons. Therefore, the EU share of the global TRQ will remain the same at 48 percent while the U.S. share will decline from 19 percent next year and to just 12 percent for the following three years.

Russia's pork imports from all suppliers are down 23 percent through October, totaling 498,205 metric tons. Imports from the EU are down 32.5 percent to 168,593 metric tons and imports from the U.S. are down 28 percent to 91,303 metric tons. Brazil and Canada share the "other" TRQ, and imports from those countries are up 3.7 percent and down 50 percent respectively. Despite many challenging circumstances, the U.S. has only lost 1 percent of its pork market share in Russia and still provides more than 18 percent of Russia's pork imports. 

On the beef side, the U.S. TRQ was increased to 21,700 metric tons for 2010-2012. This is an increase from the 18,500 metric ton TRQ of 2009. U.S. beef muscle cut exports to Russia totaled 15,668 metric tons last year but 2009 exports have fallen 78 percent (to 3,414 metric tons) through October. The in-quota tariff rate on beef is also 15 percent. The over-quota rate this year is 30 percent (but not less than 0.3 euro/kg), but an increase to 50 percent is anticipated.

Russia’s global TRQ for frozen beef is expected to increase from 450,000 metric tons in 2009 to 530,000 metric tons in 2010-2012. The EU has historically been allocated the majority of the TRQ, but that portion has been gradually reallocated to other countries (mainly South America) in recent years. Similarly, the EU portion of the 2010-2012 frozen beef TRQ is expected to be reduced.

Russia's beef imports from all suppliers are down 26 percent to 500,523 metric tons through October. Imports from Brazil, the largest supplier, are down 21 percent to 262,843 metric tons. However, imports from Argentina are up 87 percent (to 101,878 metric tons) fueled by its large cattle slaughter, low prices and the government's relaxation of its export restrictions. Imports from Australia are down 77 percent to 13,027 metric tons.

Though official data is not yet available, an increase in the duty on pork and beef offal is also anticipated, from 15 percent currently to 25 percent in 2010.

For poultry, the U.S. TRQ is expected to be reduced from 952,000 metric tons this year to 600,000 metric tons in 2010, 446,000 metric tons in 2011 and 409,200 metric tons in 2012 as Russia moves toward self sufficiency. Poultry also faces a high over-quota rate of 80 percent with 15 percent paid on in-quota exports.

# # #

The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.

For more information, contact Jim Herlihy at jherlihy@usmef.org.

USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law.

Changes Announced in Russia’s Tariff Rate Quotas

USTR has confirmed that the Russian Ministry of Economic Development will implement the new tariff rate quota (TRQ) volumes that were included in the draft decree released in October.

For the United States, the most significant change from 2009 is a reduction in the pork TRQ from the current 2009 volume of 100,000 metric tons to 57,500 metric tons in 2010 and 2011, and 51,600 metric tons in 2012. Exports within the TRQ are subject to a 15 percent duty, with much higher duties assessed on over-quota exports. The out-of-quota rate was 60 percent in 2008 and was increased to 75 percent (but not less than 1.5 euro/kg) in 2009.

Even though the volume of the U.S. TRQ is being reduced by 42 percent, the higher out-of-quota rate is expected to be applied in 2010. Out-of-quota exports are achievable, however, if the economic climate is favorable. For example, U.S. pork exports to Russia totaled 150,407 metric tons in 2008 when the U.S. had only a 49,800 metric ton TRQ. 

Although official numbers are not yet available, Russia’s global pork TRQ is expected to total 472,100 metric tons in 2010, with the largest portion (48 percent or 225,000 metric tons) allocated to the EU and 189,600 metric tons to other countries. This compares to the current global TRQ volume of 531,900 metric tons, in which with the EU controls 253,400 metric tons and other countries hold 177,500 metric tons. Therefore, the EU share of the global TRQ will remain the same at 48 percent while the U.S. share will decline from 19 percent next year and to just 12 percent for the following three years.

Russia's pork imports from all suppliers are down 23 percent through October, totaling 498,205 metric tons. Imports from the EU are down 32.5 percent to 168,593 metric tons and imports from the U.S. are down 28 percent to 91,303 metric tons. Brazil and Canada share the "other" TRQ, and imports from those countries are up 3.7 percent and down 50 percent respectively. Despite many challenging circumstances, the U.S. has only lost 1 percent of its pork market share in Russia and still provides more than 18 percent of Russia's pork imports. 

On the beef side, the U.S. TRQ was increased to 21,700 metric tons for 2010-2012. This is an increase from the 18,500 metric ton TRQ of 2009. U.S. beef muscle cut exports to Russia totaled 15,668 metric tons last year but 2009 exports have fallen 78 percent (to 3,414 metric tons) through October. The in-quota tariff rate on beef is also 15 percent. The over-quota rate this year is 30 percent (but not less than 0.3 euro/kg), but an increase to 50 percent is anticipated.

Russia’s global TRQ for frozen beef is expected to increase from 450,000 metric tons in 2009 to 530,000 metric tons in 2010-2012. The EU has historically been allocated the majority of the TRQ, but that portion has been gradually reallocated to other countries (mainly South America) in recent years. Similarly, the EU portion of the 2010-2012 frozen beef TRQ is expected to be reduced.

Russia's beef imports from all suppliers are down 26 percent to 500,523 metric tons through October. Imports from Brazil, the largest supplier, are down 21 percent to 262,843 metric tons. However, imports from Argentina are up 87 percent (to 101,878 metric tons) fueled by its large cattle slaughter, low prices and the government's relaxation of its export restrictions. Imports from Australia are down 77 percent to 13,027 metric tons.

Though official data is not yet available, an increase in the duty on pork and beef offal is also anticipated, from 15 percent currently to 25 percent in 2010.

For poultry, the U.S. TRQ is expected to be reduced from 952,000 metric tons this year to 600,000 metric tons in 2010, 446,000 metric tons in 2011 and 409,200 metric tons in 2012 as Russia moves toward self sufficiency. Poultry also faces a high over-quota rate of 80 percent with 15 percent paid on in-quota exports.

# # #

The U.S. Meat Export Federation (www.USMEF.org) is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn and soybean checkoff programs.

For more information, contact Jim Herlihy at jherlihy@usmef.org.

USMEF complies with all equal opportunity, non-discrimination and affirmative action measures applicable to it by contract, government rule or regulation or as otherwise provided by law.