April 11, 2011

Belarus may postpone milk powder exports to Russia

Both Belarus and Russia have agreed on rules for dairy production in the Customs Union market, as the rules on the supplies of milk powder are aimed at maintaining stability in the dairy market.

According to the National Dairy Producers Union, the production of raw milk in Russia rose by 30% in summer, as well as the milk powder output. As a rule, up to 80% of milk powder (132,000 tonnes) is produced in the spring-summer period, also known as "the big milk season". Soyuzmoloko sees it necessary to postpone the imports of Belarusian dairy products, milk powder first and foremost, to the autumn-winter period.

Under the trade balance adopted by Belarus and Russia, Belarus is to export 85,000 tonnes of milk powder to Russia in 2011 (65,000 tonnes of fat-free milk powder and 20,000 tonnes of whole milk powder).

In the run-up to "the big milk season", both parties agreed to adjust the amount of milk and dairy supplies on a weekly basis if necessary. In the near future, the recommended prices for butter and procurement prices for milk will be adjusted upward. Having analysed Russia's demand and Belarus' export potential, Belarus upheld the Soyuzmoloko initiative to increase import duties on some dairy products, and the issue will be raised at the forthcoming session of the Customs Union Commission.

The parties expressed concern over the inflow of cheap, often low-quality Ukrainian dairy products to the market of Russia and Belarus. They see it necessary to tighten control over the observance of technical regulations on milk and dairy products.

With a view to reinforcing control over and enhancing the quality of dairy products, the Ministry of Agriculture and Food of Belarus and Soyuzmoloko have agreed to jointly compile a list of companies authorised to sell milk and dairy products on the Customs Union market. The Moscow Interbank Currency Exchange and the Belarusian University Commodity Exchange will also work out a mechanism of participation of the authorised companies in the auctions at the National Mercantile Exchange of Russia. The auctions are scheduled for the end of April 2011.

According to Andrei Danilenko, Russia and Belarus have become milk partners. "From now on we will coordinate our efforts and strive to maintain the common food security," he said.

According to the Ministry of Agriculture and Food of Belarus, such a cooperation experience might be adopted by other branches of agriculture. "We appreciate our cooperation with Soyuzmoloko. Last year we managed to make a huge breakthrough in unifying the dairy markets of our countries, now all our efforts will be channelled into stabilisation and development," Mikhail Rusy said.