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Russia may be open to import of dairy products from India soon

The Western sanctions have been biting hard on the import of dairy products in Russia

Dilip Kumar Jha Mumbai
Last Updated : Dec 26 2014 | 2:19 AM IST
Faced with a large shortage of dairy items after the European Union's decision not to export to it, Russia is expected to open the doors to Indian imports. A team of Russia’s phytosanitary watchdog, Rosselkhoznadzor, had visited India between October 27 and November 8 and inspected dairy plants (including those making cheese) interested in exporting their products to Russia, Belarus and Kazakhstan.

The delegation inspected facilities that supply corresponding raw materials and other organisations involved in the production and control of the corresponding regulated goods produced at the inspected plants. According to trade sources, the team showed satisfaction over the manufacturing practices adopted by Indian dairy plants.

“We are still awaiting reports from the Russian authority (Rosselkhoznadzor) for the inspection carried out on Indian plants in November. They were very positive towards India,” said Santosh Sarangi, chairman of Agricultural and Processed Food Products Export Development Authority (Apeda).

Indian producers indirectly export milk products to Russia through various European countries. That route is closing now as EU nations are now not exporting to Russia due to sanctions imposed by the Western world.

Trade sources say Sergey Dankvert, head of Rosselkhoznadzor, and Apeda Chairman Sarangi have agreed to complete the Russian requirements to adhere to quarantine and other certification issues in two months ending December.

Russia’s annual dairy product import requirements are estimated at above 5,000 million tonnes. The country used to purchase around half of its dry milk and cheese requirements from the constituents of former Soviet Republic and Finland. Russia has imposed a one-year ban targeting all meat, fish, dairy, fruit and vegetables from the European Union, the United States, Canada, Norway and Australia, in retaliation at western economic sanctions over Moscow's role in the Ukraine crisis.

Data compiled by the European Commission show European Union dairy exports to Russia were worth 2.3 billion euros ($3 billion) in 2013. Cheese accounted for almost half.

“This offers a huge opportunity for Indian dairy exporters. If opened, India can get a huge benefit of the supply shortage faced by Russia,” said Ajay Sahai, Director General of the Federation of Indian Export Organisation (FIEO).

Meanwhile, the EU has offered huge incentives to compensate the losses suffered due to the ban on dairy imports from Russia.

The European Commission has announced that it will open private storage aid for butter, skimmed milk powder (SMP) and certain types of cheese in order to alleviate the impact of Russian restrictions on imports of EU dairy products and to limit the negative effects on the internal market.

India now has indisputably the world's biggest dairy industry — at least in terms of milk production; last year India produced close to 100 million tonnes of milk, 15 per cent more than the US and three times as much as the much-heralded new growth champion, China.

The dairy sector in India has shown remarkable development in the past decade. India's export of dairy products stood at 159,228.52 tonnes to the world for Rs 3,318.53 crore during the year 2013-14. India’s major dairy product export destinations  include Bangladesh, Egypt, the United Arab Emirates, Algeria, Yemen and Pakistan.

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First Published: Dec 25 2014 | 10:34 PM IST

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