Russia raises compensation for cost of exporting dairy products to 100% in 2024
MOSCOW. Jan 9 (Interfax) - The Russian government has raised compensation for the cost of exporting dairy products to 100% in 2024 from 25% previously.
A resolution on the matter was signed on August 1, 2023.
The products that get priority in transportation are milk, cream, whey, butter, and cheeses.
The decision was made due to the increase at processing enterprises of dairy product inventory with long storage life, which reduces the purchasing price from milk manufacturers, the Russian Agriculture Ministry has said. Stimulating transportation will help prevent negative tendencies on the domestic market, it said.
The Russian dairy industry is now starting a new development stage, which is export-oriented, Artyom Belov, general director of the National Dairy Producers Union (Soyuzmoloko), has said. "Many companies are now actively starting supplies to external markets, which were previously closed to Russia. And these are not partners from the CIS countries, which are traditional to us, but the states of Africa, Asia and the Middle East. The main barrier to more intensive export development has always been logistics, which was very expensive and made Russian dairy products non-competitive," he said.
The new type of support will give Russian enterprises advantages on external markets, which is important at the time of entering new markets, Belov said. "It's extremely important to ensure financing of the new support instrument," he said.
Kirill Chechin, managing director of Komos Group LLC, a major Russian dairy producer, sad the concession should apply to a wider range of products, in particular, ice cream and fermented milk products.
Russia exported dairy products worth $500 million in 2022.
The mechanism of compensation payments to exporters was introduced in 2017, the Agriculture Ministry said. The compensation rate for all exporters selected by the ministry at a tender was the same and reached 25% of the costs of logistics by all types of transport from the place of shipmen to the end recipient. In 2023, the total amount of compensations reached 11 billion rubles.
The Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor) said Russia is able to export dairy products to 70 countries but only exported to 22 in 2023.
