PHOTO: VLADISLAV VOROTNIKOV
PHOTO: VLADISLAV VOROTNIKOV
In 2021 it is expected that milk production will increase with 500,000 tonnes.
the same period of the previous year, according to Natalia Penkova, an analyst at the Institute for Agricultural Market Studies (IKAR). For instance, stocks of skimmed milk powder have increased by 136%.
Dairy stock “Stocks in the warehouses of dairy processing enterprises are growing primarily due to a decrease in sales through the hos- pitality channel and a drop in household incomes with the continued growth of production,” says Artem Belov, chairman of the Russian Union of dairy producers Soyuzmoloko. The stocks of butter hit the four-year record of 22,000 tonnes, up 42% compared to the previous year, while stocks of cheese amounted to 51,000 tonnes, up 5% compared to 2019, Soyuzmoloko estimated. “These residues will exert a very serious price pressure on the raw materials sector and on processors,” Belov warns. Howev- er, the picture is far from critical, and most market partici- pants believe the pandemic will not disrupt the continuing growth of the Russian dairy market. “Since 2016, milk production in Russia has increased by 1 million tonnes. In 2020, it is expected to amount to 34.8 million tonnes. In the next five years, it could grow by 1 million tonnes more,” says Andrey Dalnov, director of Rosselkhozbank’s analytical department. In some product categories, dairy product consumption is not comparable to the European Union (EU). For instance, in Russia, cheese consumption per capita is only 6.4kg, com- pared to 20.2kg in the EU, Dalnov estimated. Basically, Russian market participants believe that domestic dairy consumption will rise towards the European level in the coming years.
International trade The Russian government has set a goal of turning the country into a net exporter of dairy products. Although this objective seems out of reach in the foreseeable future, some Russian companies did take advantage of the slump in the Russian ruble’s exchange rate to boost export supplies. In the first half of 2020, the country exported 13,000 tonnes of cheese for $ 43 million, the Russian Federal Customs Service estimated. In monetary terms, the export increased by 12%. More than half of Russian cheese exports still land in post-So- viet countries, but this year has been notable for rising export supplies to further abroad. For instance, this year the country exported 109 tonnes of cheese to China, 126 tonnes to Mon- golia, 27 tonnes to the US and 23 tonnes to Germany. “Since 2016, the export of dairy products has increased by 19% and in 2019 amounted to $ 287 million. The supplies of fermented milk products, ice cream, cheese and cottage cheese are growing,” Patrushev says. On the other hand, de- spite the pandemic and the Russian government’s import-re- placing campaign, importers apparently are not going to give up on the country’s market. In the first half of 2020, Russia imported 3.6 million tonnes of dairy products in milk equivalent, up 2.4% compared to the same period of the previous year. In monetary terms, imports totalled $ 1.4 billion, of which 25% came from countries further abroad. Belarus is the main supplier of dairy products to the Russian market. However, imported cheese from New Zealand, Uruguay and Switzerland hold ground in the Russian market’s premium segment, where not many local products can match these in terms of quality. Local market participants believe that the pandemic will most likely leave this segment untouched.
Russia is set to boost dairy exports.
▶ DAIRY GLOBAL | Volume 8, No. 1, 2021
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