Duties on Russian butter imports may be set to zero for six months - sources

MOSCOW. Oct 30 (Interfax) - Russia may set duties on butter imports to zero for six months amid rising domestic prices for the product, sources familiar with the discussion of this issue told Interfax.

"Introducing a duty-free regime for butter imports for half a year is being considered," one of the sources said. The proposal came from the Agriculture Ministry, they said.

The subcommittee on customs issues has already considered and approved setting import duties on butter to zero, another source said. The Eurasian Economic Commission needs to be consulted in order to make the decision, a further source said. This should take place this week.

At issue are supplies of butter from outside the Eurasian Economic Union (EAEU), in particular from Iran and India.

The basic duty on butter imports stands at 15%, but no less than 0.22 euros per kilogram.

The Agriculture Ministry did not respond to Interfax's enquiries.

The situation around butter is very similar to what occurred with eggs at the end of last year, the sources said. At that time, a sharp rise in egg prices amid increased demand made it necessary to set import duties to zero. This measure was in effect from June 30, 2024, and made it possible to supply up to 500 million eggs. When the validity period for the preferential regime expired, the Agriculture Ministry said there was no need to extend it.

As reported, prices for butter have risen 23.4% in Russia since the start of the year, according to Rosstat. They rose 5.1% in September, the highest rate of growth on the dairy market. Prices rose 1.6% in the week October 15-21, speeding up from the 1.4% seen in the preceding week.

The situation has attracted considerable attention from the authorities. Deputy Prime Minister Dmitry Patrushev held a meeting at which relevant government agencies were assigned a number of tasks which aim to stabilize prices for butter. Patrushev will hold the next meeting on October 31, sources said. Its participants plan to discuss measures to restrain prices for food products at risk of becoming more expensive.

The Federal Antimonopoly Service is also monitoring the situation.

According to the Federal State Information System for Veterinary Medicine under the Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor), production of butter in Russia stood at 384,300 tonnes as of October 29, up 3.5% year-on-year from 371,300 tonnes. During this period, Russia imported 112,300 tonnes of butter, up 9% YoY.