Russia gears up to EU dairy exports

Related tags Dairy products European union Eu

The EU has made no secret of the fact that it is now looking into
sourcing dairy products from Russia. Simon Pitman spoke to
the Russian Ministry of Agriculture to find out about how
under-utilisation of production facilities in both sectors could be
addressed by increasing exports to the burgeoning EU market.

Last week the head of the Russian Federal Veterinary and Vegetation Service, Sergei Dankvert, confirmed to press that an EU delegation was visiting Moscow. He said the aim of the visit was to show the EU authorities just how much the Russian food sector had progressed in recent years and how well prepared it was to start exporting dairy products to EU countries.

The delegates were touring food processing facilities in Moscow, Barnaul and Lipetsk, as well as meeting up with various heads representing the dairy sector. Currently existing trade between the EU is still very limited, however, the volume of exported foods from Russia is expected to rise after accession as Russia already has established markets in a number of the 10 accession states.

To find out more about how Russian dairy processors are gearing up to EU exportation,​ spoke to Alexander Lachovich, deputy for food markets at the Russian Federal Ministry of Agriculture.

In response to asking exactly what it is the EU delegation have been looking for in the course of their visit, Lachovich replied: "For all food and beverage manufacturers wishing to export their products into the EU it is necessary to have certificates of quality that meet the requirements and norms for food stuffs, as specified by the authorities. This in particular is the case for dairy produce.

"Meeting these requirements is the biggest challenge in our efforts to reach EU export markets for food products. Currently not all finished foods produced in the Russian market correspond to the technical parameters registered in 'the European norms and rules' guidelines - although quality standards are exceptionally high. This gives rise to the issue of quality and competitiveness of Russian meat and dairy products.

"The second issue, which is just as important, is the required stimulus needed to increase manufacturing volumes. Certainly if demands for export are significant, the prospects of production volumes responding to the demands are very high as the means to meet such requirements definitely exist."

Lachovich also pointed out that certain dairy products would probably prove to be more favourable to export to the EU markets than others. With regards to the dairy sector he said that Russian specialities such as 'vareneki' - similar to ravioli but filled with cottage cheese - might be a good choice for exportations.

"I think that the European market currently has a sufficient enough supply of products such as yoghurt,"​ he said.

In the Russian dairy sector production capacity is said to be nowhere near capacity, and in many cases production facilities are seriously under utilised. In view of this, increasing exports to the wealthier EU countries - where after accession there will be an estimated 456.6 million consumers - might be a good way of increasing capacity and in turn enhancing both production costs and efficiencies.

"Often many production facilities in the dairy sectors are working at no more than 40 per cent of their capacity, so there is an opportunity to increase output and push exports. This is especially true for dairy products, as there is huge potential to develop the raw milk sector in Russia.

Certainly the potential for the Russian dairy sector to tap into the EU market is enormous, as Lachovich points out.

"With the quality of Russian dairy products continuing to rise, luxury, delicatessen or traditional Russian products are likely to have huge market potential. Added to the fact that there remains a huge imbalance between the importation of food products into Russia and the exportation of its food products abroad, the necessity to counterbalance this situation would also point to greater opportunities for Russian dairy processors."

The interview for this article was bought about through the kind co-operation of Moscow-based market analysis company Market Advice​.

Related topics Markets Emerging Markets

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