UPDATE 4-Russia to partly lift chicken ban; US wants more

Fri Aug 13, 2010 6:17pm EDT

* Russia says allows imports from 68 US plants out of 87

* US says proposal not acceptable implementation of deal

* US-only 8 of 27 processing plants accepted

* US-other 60 plants are cold storage facilities

* US says will continue to press for full implementation (New throughout, updates with U.S. government statement, adds background; adds bylines, second dateline, previously MOSCOW)

By Dmitry Solovyov and Roberta Rampton

MOSCOW/WASHINGTON, Aug 13 (Reuters) - Russia, the top market for U.S. chicken, will lift a ban on U.S. poultry imports starting Aug. 16, the Interfax news agency quoted Russian Agriculture Ministry spokesperson Oleg Aksyonov as saying on Friday.

Russia, where U.S. poultry has been banned since January, will allow poultry imports from 68 U.S. plants out of a total of 87 proposed by the U.S. side, Aksyonov said.

But after meeting with Russian counterparts in Geneva to try to restart trade, halted since January, a U.S. government team said Russia's proposal was not an acceptable way to implement a deal signed on June 24 by President Barack Obama and President Dmitry Medvedev.

"We will continue to press Russia to fully implement this agreement," a statement from the U.S. government team said.

Moscow said the approved plants meet the production and processing conditions set by Russia's animal and plant health watchdog RosSelkhozNadzor.

But the U.S. team said the list includes only eight of 27 poultry slaughter and processing plants that the U.S. Agriculture Department has determined should be eligible to ship to Russia.

"The remaining 60 plants that Russia is listing are cold storage facilities that can only handle poultry if there is poultry to handle," the U.S. statement said.

U.S. shippers had begun loading up exports, confident that the June deal would hold, when Russia's animal and plant health watchdog said it wanted to inspect plants, frustrating top U.S. officials who said that wasn't part of the agreement. [ID:nN04259863]

Russia has been the largest export market for U.S. chicken, but is also trying to spur its domestic production. When it banned U.S. chicken in January, Russia cited concerns about a chlorine rinse used in U.S. processing plants to kill pathogens that can cause food poisoning. Moscow's consumer watchdog said the rinse did not comply with safety regulations.

Some U.S. analysts said the ban was a way to protect Russian chicken producers from cheaper U.S. imports.

After the Russian news broke earlier on Friday, shares of U.S. meat companies traded higher.

"The opening of Russia to U.S. poultry is a strong catalyst for chicken processors Sanderson Farms (SAFM.O) and Tyson Foods (TSN.N). We also expect that Smithfield Foods SFD.N and Hormel Foods (HRL.N) will benefit from overall reduction of protein supplies in the U.S. market," Stephens Inc analyst Farha Aslam said in a research note published before the U.S. government provided details of the Russian proposal.

At the New York Stock Exchange on Friday, Tyson Foods closed up 1.75 percent at $16.27, Smithfield Foods up 2.57 percent at $14.78, Hormel up .49 percent at $42.90, and Pilgrim's Pride Corp PPC.N up 2.86 percent at $6.12.

In Nasdaq trading, Sanderson Farms was up 1.8 percent at $43.01.

The U.S. shipped 733,000 tonnes of poultry meat to Russia worth $752 million in 2009. The U.S. quota for 2010 was set at 600,000 tonnes, but Russia has allowed other suppliers to use a quarter of it. (Additional reporting by Bob Burgdorfer in Chicago; Editing by Lisa Shumaker and David Gregorio)

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