RPT-UPDATE 5-Russia seeks new chicken supplies as US talks end

(Repeats, fixes typo in byline)

* Russia seeks alternative poultry suppliers

* U.S. talks end with progress, but no deal

* News weighs on U.S. hog futures

* US trade group optimistic will be resolved within weeks

* No legal remedy because Russia does not belong to WTO
(Updates with comment from U.S. trade group)

By Aleksandras Budrys and Roberta Rampton

WASHINGTON/MOSCOW, Jan 21 (Reuters) - Russian chicken
importers have begun seeking alternative suppliers, including
Thailand, as talks with U.S. experts ended on Thursday without
a commitment to reopen the biggest U.S. export market.

Russia, which spent $800 million on U.S. poultry in 2008,
has banned imports from its largest supplier on concerns about
the common U.S. practice of treating the meat with chlorine to
kill bacteria that can cause food poisoning.

Both sides said progress was made during two days of talks
in Moscow and that negotiations would continue soon to resolve
the meat dispute. Russia also has banned pork from all but six
U.S. processing plants for excessive antibiotic residues.

No date has been set for the resumption of talks. Lack of a
deal weighed on hog futures in Chicago as traders anticipated
increased chicken supplies in the U.S. market that would
compete with pork.
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Graphic on US exports to Russia:
here
Q+A on the Russia-US meat dispute, click on: [ID:nLDE60H0TY]
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Russian importers are seeking other suppliers, the head of
the country's powerful meat industry lobby said.

"Business is beginning to evaluate the new realities, and
is preparing to work in the conditions of these new realities,"
said Sergei Yushin, head of the National Meat Association.

"Importers are already working actively with some European
and other countries," he told Reuters by telephone.

But the president of the USA Poultry and Egg Export Council
said he believes the trade issue will be resolved before most
Russian importers need to make changes.

"I'm very optimistic that this issue will be favorably
resolved in the next few weeks," Jim Sumner told Reuters in an
e-mail from Moscow.

Russia suspended U.S. poultry imports from Jan. 19 and has
taken a hard line with Washington, accusing it of flouting food
safety laws. The United States says its poultry is safe and
some critics say Russia's ban could be politically motivated.

Talks took place under tight secrecy in Moscow. Russia's
only official comment was a statement by consumer protection
watchdog Rospotrebnadzor, whose head, Gennady Onishchenko, was
the lead Russian negotiator.

"The participants believe the talks allowed each party to
clarify many aspects of their positions and to bring them
closer to each other," the watchdog said. "The parties agreed
to proceed with talks in the near future."

Visiting U.S. officials declined to be interviewed in
Moscow. U.S. Agriculture Secretary Tom Vilsack said more work
would be required to resolve the issue. [ID:nWAT014042]

ALTERNATIVE SUPPLIES

Exports to Russia of pork, poultry and beef combined earned
the United States more than $1.3 billion in 2008. Russia is the
biggest U.S. export market for poultry and ranks among its top
five pork markets and is the No. 10 beef buyer.

Russia's meat bans could affect U.S. companies like pork
industry leader Smithfield Foods Inc (SFD.N), Tyson Foods Inc
(TSN.N) and Sanderson Farms (SAFM.O) [ID:nN15203392] .

The April lean hog futures contract 2LCJ0 posted a
one-week low on Thursday, partly due to the news from Russia.

Talks about trade spats can take "weeks and months," said
David Bond, a trade lawyer with White & Case who represents
meat companies and groups.

There's no legal remedy for the issue because Russia is not
a member of the World Trade Organization, Bond noted. The
European Union has a similar ban on U.S. poultry.

Rosselkhoznadzor head Sergei Dankvert has held talks with
officials and businesmen from Thailand, the watchdog said.
(Additional reporting by Christopher Doering and Roberta
Rampton in Washington, Jerry Bieszk in Chicago, writing by
Robin Paxton in Moscow, graphic by Jasmin Melvin; Editing by
David Gregorio)