Russian cow of dairy export

The aim to provide food for the country is almost achieved, it is time to think of increasing exports, said Prime Minister Dmitry Medvedev at the final Board meeting of the Ministry of agriculture. However, the situation with the sufficiency of the country with milk is such that the export in this industry is akin to the cow that is needed most. But it is not for the reason that the cow is good, but due to the fact that there are few of them in the country.

Export is attractive to manufacturers of finished dairy products at least for the reason of foreign exchange earnings. Currently, the key markets for Russian foreign supplies of dairy products are the CIS countries. According to experts, the supplies to more complex markets, like Asia, the EU, etc., are difficult, but not impossible. However, it is necessary to work carefully on the range of products for export in these areas; we must offer unique products in demand for new markets.

"I don't believe that new exporting countries will appear on the market. And not all of them are wanted. Almost all major countries have a system of import quotas, customs regulations of agricultural products and such an important moment, as the customer loyalty to local products. And in the dairy industry this question even more difficult," - said Michael Lyasko, General Director of "Arla foods" in his comments to The DairyNews.

Expert opinion is generally supported by the majority of market participants of the Russian Federation, and the Head of Government noted earlier that Russia (and its exports) "to put it mildly, is not everywhere waited for".

"This is a separate task that requires consolidated efforts of not only business, of course, but consolidated efforts of the state, because penetration to foreign markets depends on how successful the talks of Russian officials are, especially in some regions,  and that is necessary in general", - said Dmitry Medvedev.

The Russian export center is sure that the milk producers of the Russian Federation should deal with the saturation of the domestic market in the first place.

"It is too early to talk about intensive export of domestic dairy products. Export is significant only in the CIS countries: Kazakhstan, Central Asia, the Caucasus, for which we are a supplier of quality product. Small shipments of niche products are made to far abroad", - said the press service of the REC. 

Meanwhile, the growth of consumer prices for dairy products on the shelves of the shops in the Russian Federation does not stop, which negatively affects the demand. Since the beginning of the year, according to Rosstat, the growth of consumer price for butter amounted to 5.5%. Cheese and rennet cheeses rose in price on average by 2.2% and 2.9% respectively. Sterilized drinking milk rose in price by 3.2%. Pasteurized milk for drinking - by 2.4%.

The domestic market is not saturated with high-quality and inexpensive products. Besides, Russian milk is not competitive on price, says Russian state Duma Deputy Arkadiy Ponomarev.

"I think the development of export markets is a correct and promising area, but it is currently problematic. Our products are non-competitive in price, despite its high quality. When we started talking about the exports, the situation in the country was the most favourable. With a weak ruble and competitive prices manufacturing for export was the most profitable. Now, with the strengthening of the ruble, the price of products also increased, although, logically, it should be vice versa. The reason for this was the lack of products on the domestic market and the high cost of its production. Its contribution made the chronic underfunding of the sector and delays in payments of subsidies. So it is premature to talk about exports without solving systemic problems in the industry. First we need to stabilize our own market and then go out and conquer the rest of the world," said Arkady Ponomarev.

The market participants call ice cream a perspective direction of export. A quality product may be required on the markets of Asia. Although, last year Chinese investors offered not to export Russian ice cream but to build a factory in China that would manufacture products by Russian recipes.

"Russian ice-cream is delivered to the CIS countries, especially to Kazakhstan, Belarus, Ukraine and Kyrgyzstan. Last year we stepped up deliveries to China – I think they made about 3 thousand tons. According to statistics, the export grew by 30%. I think it was due to the boom, which was formed after Putin made a gift in the form of a box of ice cream to Xí Jìnpíns. This theme was in headlines for a month or two. As a result, Russian producers began to think of ways to increase their supply. Only "Lipetskiy refrigerating plant" sold one and a half thousand tons of ice cream. "Petroholod" opened its representative office in Beijing. The transport path, including a refrigerated version is being established to," - said the General Director of the Russian Union of ice cream producers Valery Elkhov to The DairyNews.
The Eurasian Economic Commission was unable to provide a prompt review. 

The Head of the Ministry of Agriculture Alexander Tkachev said at the final Board of the Ministry, that milk is an export product. But it is necessary to think about exporting after saturation of the domestic market. A number of experts interviewed by The DairyNews, noted that Russia will be able to saturate the market only with the help of Belarus. But in this case, for companies that want not only to live, but to develop as well, it is time to pave the road for distant export markets. 

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