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Cablegate: Russia Lifts Ban On Polish Meat

VZCZCXRO0992
PP RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHWR #2369/01 3471444
ZNR UUUUU ZZH
P 131444Z DEC 07
FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC PRIORITY 5634
INFO RUCNMEM/EU MEMBER STATES
RUEHSK/AMEMBASSY MINSK 3501
RUEHMO/AMEMBASSY MOSCOW 2731
RUEHKW/AMCONSUL KRAKOW 1931
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHBS/USEU BRUSSELS
RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS SECTION 01 OF 02 WARSAW 002369

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EAGR ETRD ECON PREL PL RU
SUBJECT: RUSSIA LIFTS BAN ON POLISH MEAT

WARSAW 00002369 001.2 OF 002


1. (SBU) Summary: Polish and Russian Ministers of
Agriculture have announced that next week the two-year old
Russian ban on imports of fresh meat from Poland will be
lifted, removing a major trade irritant. Thanks to strong
demand, trade levels should quickly rebound. The Russian
embargo on poultry and selected plant products remains in
place. Resolving the meat ban is a high profile win for the
Tusk government's strategy of seeking a renewed constructive
dialogue with Russia. End summary.

---------------------
Meat Ban To Be Lifted
---------------------

2. (U) On December 12 the Polish Minister of Agriculture,
Marek Sawicki, and the Russian Minister of Agriculture,
Aleksey Gordeyev, announced in Moscow that as of next week
the Russian ban on Polish beef and pork which began in
November 2005 will be lifted. Next week, Polish and Russian
Veterinary authorities will sign an agreement in Kaliningrad
lifting the ban with immediate effect.

3. (U) Russian authorities have just concluded a routine
inspection of facilities and agreed that additional
inspections are unnecessary. Because of the strong demand
from Russia, sales should recover quickly to pre-embargo
levels. Post estimates that Poland will export USD50 million
in chilled and frozen pork and beef to Russia in 2008, which
would make Russia the largest export market for unprocessed
Polish red meat.

---------------------------------------
Effects of the Ban On Trade With Russia
---------------------------------------

4. (U) The ban imposed by Russia has been in place for over
two years and has adversely affected Polish exports of pork
and beef. In late 2005 the ban had only a limited impact on
the Polish pork industry because it was a period of pork
shortages and strong export demand. However, the situation
changed in late 2006 and 2007 when pork supplies increased
and export markets shrunk due to a pork surplus in the
European Union. The ban had a strong impact on overall
exports of Polish agricultural products to Russia in 2006.
However, its impact diminished in 2007 because of growing
Polish dairy exports to Russia.

5. (U) Although Russia was a major market for fresh and
frozen unprocessed pork and beef before the ban, it is a less
important market for these products when including all
processed meat exports. In 2004 the Russian share of Polish
meat exports of both processed and unprocessed pork and beef
were only 11 and 2 percent, respectively. However, exports
to Russia were important for the Polish meat industry because
the type of cuts that were most popular in Russia, such as
chilled pork halves, were not popular in other markets.

------------------------------
Limited Effect on U.S. Markets
------------------------------

6. (U) The current low farm-gate prices and oversupply of
pork in Poland, in addition to the export subsidies recently
announced by the European Union, will bolster Polish pork
exports in 2008. In addition, traders speculate that the
opening of the Russian market may lead to the reopening of
the market in Belarus to Polish meat exports, a market
similar to Russia in size and type. The end of the Russian
embargo will not limit Polish meat exports to other EU Member
States and the United States, because these consumers demand
different types of cuts and meat products.

------------------------------
Other Embargoes Still In Place
------------------------------

7. (U) Despite the end of the red meat ban, the embargo on
both poultry meat and select plant products to Russia (which
also began in November 2005) is still in place. The next
meeting between the Polish and Russian Ministers of
Agriculture is expected to occur in January 2008 in Berlin
during the "Green Week" trade fair. During this meeting a
new agreement opening the Russian market to Polish plant
products may be signed.

WARSAW 00002369 002.2 OF 002

-------
Comment
-------

8. (SBU) The Russian meat ban has been a charged bilateral
irritant for over two years, and emblematic of the chilly
relationship between the former Kaczynski government and
Moscow. The lifting of the ban is a high profile political
win for new PM Donald Tusk, and signals an improvement in
relations between Poland and Russia. While not as
reflexively anti-Russian as its predecessor, this government
remains essentially suspicious of Moscow, although happy to
provide Russia something more to chew on.
ASHE

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