April 3, 2012

Belarus reduces dry whole milk, whey powder exports to Russia

Starting April 1, under an interstate agreement, Belarus will minimise the export of dry whole milk and whey powder to Russia, a news agency reported.

The agreement requires Belarus to reduce the export of these dairy products to a minimum when the seasonal increase in Russia's milk output begins, the news agency said, adding that the exports would be resumed in full when both parties saw fit.

At the same time, Belarus may increase the export of other dairy products to Russia, namely, concentrated milk, whole milk products and cheeses, during the period of "big milk," according to Russia's National Union of Dairy Producers (Soyuzmoloko). Belarus is expected to supply 3.7 million tonnes of dairy products (raw milk equivalent) to Russia in 2012. At the beginning of March, the Belarusian government promised that the benchmark prices of dairy products supplied to Russia in 2012 would not be lowered.

On February 20, Soyuzmoloko urged the Russian agriculture ministry to ban the deliveries of dried whole milk and whey powder from Belarus until the end of 2012. The price of raw milk averaged out at RUB15-16 (US$0.51-0.55) per litre in Russia before the end of 2011 compared with no more than RUB11 (US$0.38) in Belarus, Soyuzmoloko said.

In addition, this winter the Belarusian agriculture ministry kept lowering the indicative prices of Belarusian dairy products intended for export to Russia. The lower prices give an "unprecedented advantage" to Belarusian dairy companies in the market of the Customs Union of Belarus, Kazakhstan and Russia, and have "destructive" effects on Russia's producers, Soyuzmoloko stressed.