March 19, 2012

Belarus to increase prices, volumes of dairy products for Russia

Russia's Agriculture Ministry said in a statement Wednesday (Mar 14) that Belarus is ready to increase its indicative prices and reconsider the volumes of dairy products supplied to the Russian market.

The Belarusian party has confirmed its readiness to revise indicative prices and volumes of dairy products supplies to prevent dumping and excessive supply on the Russian market, Agriculture Minister Yelena Skrynnik said as cited in the statement.

Earlier, Russia's National Dairy Producers Union (SoyuzMoloko) asked the Agriculture Ministry to revise recommended indicative prices of dairy products for the Russian market as well as the balance of milk and dairy products trade with Belarus.

SoyuzMoloko points out that the average price of milk in Russia in early 2012 stood at RUB15-16 (US$0.51-0.55) per kilogramme, while in Belarus the price of milk would hardly exceed RUB11 (US$0.38). SoyuzMoloko believes Belarus has been abusing its competitive advantage by selling milk and dairy products on the Russian market at dumping prices within the framework of the Customs Union.

SoyuzMoloko emphasises that Belarus' dairy export to Russia will eventually undermine Russia's dairy industry.

The Russian association of milk producers wants the Russian government to suspend imports of Belarusian-made dairy products to Russia till the end of 2012, unless Belarus agrees to adjust the price of milk exports to Russia.

SoyuzMoloko claims Russian milk producers alone are capable of saturating the Russian market with dairy products and meet the market the demand for milk.

In the meantime, in reply to SoyuzMoloko Russia's agriculture minister Yelena Skrynnik said there is no way to restrict dairy imports from Belarus, as Russia and Belarus belong to the Customs Union, whose members have agreed on the terms of free trade and the level of state support in the agricultural sector.