(Adds impact on Chicago hog futures, analyst and trader
MOSCOW, March 4 Russia needs more guarantees on
food safety from two U.S. pork packing plants in order to resume
imports from the United States around March 10 as it had
originally targeted, Russia's veterinary and phytosanitary
watchdog (VPSS) said on Tuesday.
"Imports from these two plants will be resumed as soon as
the issue with refrigerators, from which supplies are due to
come, is resolved," VPSS spokesman Alexei Alekseenko said.
"I can't say if it's going to happen before March 10, it
depends on the U.S. side," he added.
The plants in question are two subsidiaries of U.S. producer
Smithfield Foods Inc, which was bought by China's Shuanghui
International Holdings last year.
Russia banned most meat imports from the United States in
February 2013 because of concerns over the use of the feed
additive ractopamine. The country previously planned to resume
pork imports from the United States from around March 10.
Russian news agencies reported earlier on Tuesday that the
request by VPSS for more guarantees meant that Russia had put
its decision on U.S. pork imports on hold.
Alekseenko said that their interpretation was wrong.
"We still plan to allow pork imports from two Smithfield
firms. This list can be broaden in future," he said.
Smithfield Foods could not immediately be reached for
comment on Tuesday.
Russia's decision to use military forces in Ukraine's Crimea
region has drawn strong criticism from Western leaders including
U.S. President Barack Obama who said on Monday that the U.S.
government would look at economic and diplomatic sanctions to
Word of potential delays in resuming U.S. pork exports to
Russia initially pressured Chicago Mercantile Exchange hog
contracts on Tuesday.
Hog futures quickly rallied in anticipation of tight
supplies tied to the spread of the deadly Porcine Epidemic
Diarrhea virus (PEDv) on U.S. hog farms.
CME hogs for April delivery closed up their 3-cent
per lb daily price limit at 111.675 cents.
Early-session selling reflected some measure of investor
uneasiness about the U.S. export situation with Russia, said
Rich Nelson, chief strategist with Allendale Inc in McHenry,
Traders were also concerned about additional Russian
restrictions given talk of possible sanctions by the United
States that could come within days, not weeks, he said.
"This is all 100 percent politically motivated on the part
of Russia," said Nelson.
He attributed futures' subsequent rebound to U.S. domestic
hog supply issues driven by the PEDv outbreak that is roiling
the U.S. pork industry. The disease is fatal to baby pigs and is
expected to reduce U.S. hog numbers beginning this spring and
through the rest of the year.
There is no official count of PEDv pig mortality. But
analysts and traders have estimated that at least 4 million pigs
may have died from the disease, which does not affect humans and
is not a food safety risk.
Dennis Smith, a broker with Chicago-based Archer Financial
Services, expects Russia will buy pork from the United States
after ironing out its differences over the Ukraine issue.
"The purchases ultimately will benefit U.S. pork producers,
in that we're going to be shipping pork to Russia sometime in
March," he said.
(Reporting by Polina Devitt in Moscow; additional reporting by
Theopolis Waters in Chicago; editing by Jason Neely and Matthew