Artem Belov: there are reasons to doubt the plans of Belarus to increase milk production
The first reason, according to Belov, is the absence of serious potential growth of raw materials production in the foreseeable future. According to the expert, up to $5 billion has been invested in the modernization of farms in Belarus over the past 10 years, the level of efficiency and the rate of increase in production remain low, and the last 2 years were equal almost to zero.
Average milk production is currently around 5 tons per head and in 10 years it grew by only by 300 kg. For comparison, in Russia during the same period, milk production at agricultural enterprises has increased almost 1.5 times and reached 5.7 tons, and commercial production has increased by more than 12% for 5 years - nearly by 2.5 million tons. By 2020 Artem Belov predicts production growth in the Republic of Belarus to 8.2 million tons instead of 9 million tons planned by the authorities of the country.
The second reason is profitability.
- The strategy to sell dairy products to Russia slightly cheaper than to the world market, but more expensive than to third countries justifies itself. Belarusian dairy products are loved in Russia. Demand for stock positions is also high, and Belarus actively exports high – quality whey, cheese, milk powder and even breastmilk replacer - the most "responsible" product in the baby food market. More than 1 billion dollars invested in the development of processing in the country, gave results. What is the probability that enterprises from the Republic will be able to compete successfully in the Chinese market with New Zealand or Europe and have a profit as in Russia? It’s an unlikely scenario, - says Artem Belov.
According to him, the high dynamics of exports from Belarus outside the CIS in 2017-2018 is the effect of a low base after the failure of 2014-15. In general, the volume is slightly higher than in 2012. In autumn, Russia is likely to open the market, and export flows will be redirected, and the recovery of demand in Russia will only strengthen this trend.
- So there will be no miracle. It's not politics, it's economy. And how to make our neighborhood more effective is a topic for a separate text, - concluded Artem Belov.
The volume of deliveries of Belarusian dairy products abroad in January - May amounted to 1.6 million tons, deliveries were made in the amount of more than $ 800 million. In the first seven months of the year, the supply of dairy products to China increased 5.6 times.
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