‘Russian ban on EU food to remain in place until at least 2018’

A leading Russian commentator on dairy markets has said that the Russian ban on EU foods is likely to remain in place until at least 2018.

Michael Mischenko, Editor of the Russian-based Dairy News, told attendees at the Dairy Industry Newsletter dairy conference ‘forget about Russia’.

The Russian ban, he said, will not be cancelled until at least 2018 because the Russian population, Government and Russian agri market are not willing to open the market.

He said the ban gives Russia the opportunity to develop its own dairy industry. One dairy company, he said is going to build a very big dairy farm to supply China, located near China, while a Vietnamese company is investing $2.5bn to build dairy processing in Moscow.

Mischenko also suggested that anyone interested in the Russian market should invest in it.

“You can invest money in Russia.” He cited the example of Stefan Duerr – one of the biggest dairy farmers in Russia, with 2,000 ha of land in Russia, is German born, while the German dairy company DMK is investing in Russia, he said.

The two largest producers of dairy products in Russia are Pepsico and Danone, he said, although almost 50% of milk in Russia is produced by ‘households’ for own consumption, which makes official production figures difficult to calculate.

“No one really knows how much milk is produced in Russia, but the official figure is 30m tonnes of milk a year.

Private farmers and agri companies, he said, are the main producers, but householders also produce their own supply, which accounts for nearly half the volume of milk in Russia.

However, dairy consumption has fallen in Russia since 2012, he said, and the Russian ban on EU foods has impacted further on that.