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Russian dairy exports to China under pressure

1 April 2021 - Folkert Flapper

Russian dairy producers have proposed to the Ministry of Agriculture to lower the import tax to China. They also want 35% of the production costs of milk powder, butter, whey and cheese to be reimbursed. Experts see the requirements as unrealistic. 

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Russian dairy producers believe that import duties on exports to China should be reduced. With this they hope to increase the export of Russian butter, cheese, whey and milk powder. Currently, the Chinese market is largely controlled by producers from New Zealand and Australia. However, competition is unfair. “Those countries pay an import tax of 0% to 5%, while for us it goes up to 25%,” reports Artem Belov, director general of the National Dairy Producers Union.

Wait and see attitude
Exports of dairy products from Russia increased by 23,7% to 871.800 tons over the past year. However, many market players are waiting. It is expected that exports can increase even further, including the many investments in the construction of modern milk processing installations. In addition, the Russian government also provides support for the production of raw materials, there is compensation for capital expenditure and many loans are issued. Milk production must therefore increase by 3% to 3,5% annually.

On the other hand, the Russian government also strives to be completely self-sufficient. Increasing exports is at odds with this. Dairy is included in the so-called 'socially important goods'. This means that the country is less interested in exporting dairy products, so stimulating exports is not a priority.

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