March 20, 2012

Russia considers dairy market intervention

National Dairy Producers Union Chairman Andrei Danilenko told reporters Monday (Mar 19) that Russia's Agriculture Ministry considers to start purchasing interventions on the dairy market, primarily dairy butter, during summer months.

He said the Russian market faced 10,000-20,000 tonnes of oversupply of dairy butter, mostly due to the wide distribution of counterfeit products, in which the dairy fat was replaced with vegetable fats, Danilenko said.

"Apart from fighting counterfeits we have an idea to withdraw oversupply from the market… The idea is to buy only from Russian producers in the summer so that those Russian producers can buy back the goods from the government in the fall-winter season, when the price grows," Danilenko said.

Dairy purchasing interventions will cover butter and skimmed milk powder. Prices for butter interventions are planned to be set given the current price corridor for milk and dairy products, Danilenko said.

An industry source said that the ministry has suggested a temporary suspension on imports of Belorussian milk and whey powder as local producers had complained of dumping.

"It would be right if we suspend butter supplies from April-September," the source said.

Danilenko also said the Eurasian Economic Commission should develop a plan for production volumes and trade turnover for dairy producers for all country-members and organise an electronic system to monitor the goods circulation.