Russia continues to block dairy imports

- Last updated on GMT

Related tags: Milk

Russian veterinary authorities will take a further three weeks to
decide the fate of Polish dairies wanting to export to Russia - a
move that is seen as part of a general trend to limit imports of
all dairy products into the country.

According to the Polish Association of Private Dairy Processors, Russian inspections have been postponed and fewer inspectors will be sent out prolonging the inspection process. Many in the industry interpret the move as stalling tactics aimed at protecting Russia's domestic dairy industry - an industry that is currently fragmented and falling well short of production capacity.

Considering the state of the Russian dairy segment, it is easier to understand why the Russian authorities are trying to promote their own dairy industry. Indeed the ultimate goal is to push exports to the EU countries.

"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,"​ Alexander Lachovich, deputy for food markets at the Russian Federal Ministry of Agriculture said earlier this year. "This is especially true for dairy products, as there is huge potential to develop the raw milk sector in Russia."

However, whether or not the measures the Russian authorities are taking to limit dairy imports in an effort to kick-start the domestic industry will work remains to be seen.

"Originally the Russian veterinary authorities were due to start inspections at the beginning of this week,"​ said Robert Gasek, spokesman for the Polish Association of Private Dairies. "However now inspections will not start until the beginning of next week, when a delegation of nine inspectors will start carrying out checks on 81 dairy processing facilities. This should take around three weeks to complete, a longer procedure than originally planned."

The move comes after Russian authorities introduced measures effective from 1 September that all EU countries and recent accession countries should meet new, stricter measures that ensure dairy products from the region are disease free. The measures for old EU countries and the accession countries aim to ensure that all dairy exports are from herds that are certified as being brucellosis and tubercullosis free.

"The Russian Veterinary Ministry requirements are no more than one page long and in theory they are not difficult to comply with, but we do not anticipate that many of our dairy members will pass the inspection as the authorities are expected to be tough on the implementation of the measures,"​ said Gasek.

In Poland the meat sector has already undergone similar inspections by the Russian Veterinary authorities. Of a total of 80 meat processing facilities that were inspected at the beginning of the month, only 16 fulfilled all the stipulations. As all of these facilities have already passed stringent EU health and safety inspections, many industry leaders have bought into question the reasons why so many facilities failed the inspections.

The fate of the meat sector in Poland leaves Gasek little room for optimism. He believes that a similar fate lies in store for Poland's dairy processors.

In the first six months of this year Poland exported €235 million worth of dairy products, a figure that has been boosted by 60 per cent, mainly as a result of the recent accession to Europe. Although the figures do not distinguish by region, Gasek says that Russia still accounts for a large proportion of this market, although it has not grown significantly.

But it is not only Poland that is suffering at the hands of the Russian veterinary authorities. Only this week Pat O' Rourke, president of the Irish Creamery Milk Suppliers Association, told reporters that is was almost impossible for its dairy farmers to comply with the Russian regulations, adding that its members stood to lose out on millions of euros worth of trade in butter and skimmed milk powder.

In the UK the situation is even worse. Dairy farmers there have faced a complete ban on the export of all dairy exports since the outbreak of BSE three years ago. "We have learnt to live with this ban,"​ Peter Dawson, policy director of the UK Dairy Industry Association, told CEE-FoodIndustry.com. "We have learnt to work around this ban and have developed new export markets as a result. The Russian authorities are notoriously difficult to work with, but we are still hoping that we can resolve the current ban and resume exports to this important market."

Related topics: Markets, Emerging Markets

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