28 Apr 2018 18:21

Russia, Belarus discuss consolidated milk supplies

MOSCOW. April 28 (Interfax) - The Russian Agriculture Ministry is proposing that milk and dairy product supplies from Belarus be consolidated by a single company, which would control the quality and volume of supplies.

"We discussed the situation at recent talks between the Russian Agriculture Ministry and our Belarusian colleagues, who account for 70% of powdered milk imports. We agreed to unify approaches to establishing a single market, including coordinating the balances of milk and dairy product supplies. The Republic of Belarus also backed a Russian initiative to use one company, via which all supplies from Belarus would be carried out, and which would monitor the quality and quantity of products supplied," the Russian ministry's press office quoted Anatoly Kutsenko, head of its Department for Agricultural Markets Regulation, as saying.

He said procurement prices for milk in Russia had been falling since the end of last year. The AgMin said that by April 19, they were below 20 rubles in Bashkortostan, Marii El, Udmurtia, Chuvashia and other traditional dairy farming regions.

Prices have fallen not so much due to higher production as the absence of effective means to control imports, including at dumping prices to make dairy products using vegetable fats, Kutsenko said.

The Federal Customs Service (FCS) says Russia imported more than 271,000 tonnes of powdered milk last year, Experts estimate undeclared milk accounts for around 20% of legally imported milk.

"The mismatch between the interests of farmers and dairies is obvious. Dairies don't really care what milk they use, whether it is produced in Russia or delivered from New Zealand, for example. What they care about is making as much profit as possible," he said.

The drop in prices has put many agricultural organizations, private farms and smallholdings on the brink, Kutsenko said. "By our reckoning, unless the situation changes, dairy farming losses could grow and exceed 84 billion rubles this year," he said.