Russia meat producer Cherkizovo expects to achieve 2010 production target levels after performing strongly across all segments in the first nine months of the year.

The firm said its performance reflected the increased demand for its products which was primarily driven by lower imports and a consequent requirement for high quality domestically sourced meat.

CEO Sergey Mikhailov said: "So far this year, inflation for meat products in Russia has been relatively low compared to other products in the consumer food basket.

"At present the operating environment remains challenging, as a result of the worse than expected grain harvest and subsequent grain shortage.

"We are now witnessing a short-term effect of oversupply of meat in the market as less efficient producers and individual households are cutting down livestock, creating a temporary downward pressure on selling prices.

"However, in the medium term these actions will potentially lead to a shortage of supply and to more aggressive meat price inflation in 2011."

Stock Market Wire