Inside Milk
Russian dairy sector is fully committed to China
The Russian dairy sector has only had access to the Chinese market for a few months, but the Russians immediately sense great opportunities. Russia expects dairy exports to increase fivefold in the coming years.
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The plans were unfolded by Dmitry Nikolayevich Patrushev, the Russian Minister of Agriculture. He spoke at the annual congress of the Russian Federation of Milk Producers in Moscow. Patrushev said milk production grew by 1,5% last year to 30,6 million tons.
On the other hand, major questions are raised about the reliability of the Russian dairy statistics. According to the Russian Dairy Farmers' Association (RSPMO), dairy production would be much lower.
Production increases
Be that as it may, Russia has big plans for the dairy sector. The minister expects an increase in milk production of about 2,8% to 31,1 million tons. Russia thus surpasses China as the fourth largest producer in the world. The distance to the top 3 (India, the United States and the European Union) is still immense.
Dairy farming in Russia is supported by various subsidy programs. For example, last year the Kremlin made more than $450 million available to modernize and expand dairy farming. The minister said that dairy farmers can also count on government support in the coming years.
Dairy exports must increase fivefold
Although production is on the rise, Russian dairy exports are actually declining. The underlying value of exports shrank by more than 2018% to $10 million in 243,5. Together with Russian dairy exporters, Patrushev will look for the reason for the decline, although this does not detract from the minister's ambitions; Patrushev wants dairy exports to grow to $2025 billion by 1.
To achieve this ambitious goal, new sales markets must be tapped. To this end, the country is focusing mainly on Southeast Asia China. The Russian dairy sector gained access to the Chinese market a few months ago and more than 25 manufacturers have already been approved to export to the country. The Russian agriculture minister expects that the first effects of this will be reflected in the export figures by mid-2019.
China is the logical choice
The choice of China is not surprising. After all, China is the largest dairy importer in the world and is experiencing rapid population growth. Eurostat expects the population in China to grow by 2040 million to 100 billion by 1,43; This growth goes hand in hand with increasing prosperity and changing consumption patterns, with dairy taking a more prominent role in eating habits.