NEW Zealand has been one of several countries supplying Russia with dairy products in the past year as other Western nations have been locked out because of an embargo. By Simone Smith.
Total dairy exports to Russia have increased 37.9 per cent from 119,000 tonnes to 163,000 tonnes, according to Dairy Australia.
This large increase is off a small base as embargoes from 2014 remain on dairy imports from the US, EU, Australia, Canada and Norway. The embargoes are in place until the end of this calendar year, when the enabling legislation is due to expire, but Dairy Australia said it could continue for the short to medium term.
Dairy Australia’s Situation and Outlook report said there had been some speculation about the end of the embargoes. The expiration of the legalisation is meant to signal a review and a probable renewal, rather than an end to trade restrictions.
Russia has increased its self-sufficiency and sought smaller volumes from countries including Argentina, Uruguay and Belarus.
New Zealand has increased its direct exports to Russia by 170 per cent to 33,000 tonnes in the past year. Dairy Australia analyst John Droppert said the Russian economy and currency was “very constrained”, which meant affordability of dairy products was an issue.
After three years of trade embargoes, developing a dairy market in Russia would be like “starting from scratch”. He predicted a burst of optimism if embargoes were lifted but said the process would be drawn out and not expected to deliver a lot of value to the market initially.
Source: Weekly Times