Markets ¦ IDM
Benefitting from the chaos
Pandemic fallout is not a concern for Russia
June/July 2020 ¦ international-dairy.com · 17
Author: Vladislav Vorotnikov, Moscow
During the first weeks of May
Russia overtook the European
countries to become number
two in the world for Covid-19
cases, but for business the
things may be not as bad as they seem.
Rather soft quarantine measures introduced
in Russia as well as in neighboring
Belarus to slow down the spread of Covid
19 epidemic could make local dairy business
even more successful on the global
market than before.
During the past few years Russia was
putting a lot of efforts in order to promote
its products overseas. In the first
two months of 2020, Russia exported
114,000 tons of dairy products, 22% up
as compared to the same period of the
previous year, the Federal Customs Service
estimated.
In 2020, it is projected that the Russian
dairy export could grow by 20% to
the last year’s level, according to Artem
Belov, general director of the Russian
Union of Dairy Producers Soyuzmoloko.
Russian government agencies are currently
in negotiations to get a green light
to export dairy products to the countries
of the Middle East, South-East Asia and
Northern Africa. By 2025, the Russian
dairy export could grow by a factor of up
to 3 times to $800 million or $900 million,
Belov said.
Weak ruble gives it all a push
The weakening of the Russian ruble
against the U.S. dollar could give a new
boost to the import-replacement campaign
on the domestic milk market, a
research conducted by the Russian stateowned
bank Rosselhozbank showed. Several
dozens of milk farms with the overall
production capacity of around 3 million
tons of milk per year could be built in
Russia thanks to the currency fluctuations
on some extent caused by Covid-19, Rosselhozbank
said.
Some parts of the Russian food industry
are also likely to get a powerful impetus
to expand export supplies, Rosselhozbank
added.
According to Daria Snitko, director of
the forecasting department of another
Russian state-owned bank, Gazprombank,
Russia is in the perfect position to
boost food export these days. It is hard
to imagine that because of the pandemic
people would consume less food, but
the global trade turnover has plummeted
and the countries which currencies
were affected, like Russia or Brazil, are
rushing to boost their export supplies,
Snitko said.
Besides, the harsh economy environment
promises to push people around
Russia is set to take advantage from the coronavirus pandemic the world towards less expensive food,
/international-dairy.com
