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While Parag Milk Foods and another Maharashtra based dairy Schreiber Dynamix Dairies have received the nod from Russia's federal inspection agency Rosselkhoznadzor to export hard cheese to that country, the country's largest dairy player Amul says that it is no longer keen on the Russian market.
Russia's federal inspection agency Rosselkhoznadzor that had inspected the facilities of both the companies, has allowed import of dairy products from their facilities to Russia.
Parag currently exports to over 37 countries across the globe, and its exports stood at 250 tonnes per month last year. Devendra Shah, chairman of the Rs 1,450 crore Pune based dairy major, said that with exports to Russia coming on stream, the company's overall exports would double to 500 tonnes per month initially. "The cheese market in Russia is more than 200,000 tonnes, and the market is hungry for quality cheese ever since the ban on imports from EU has been imposed. It is indeed a great opportunity for Indian players to enter the market," Shah said.
Schreiber Dynamix could not be reached for a comment. It has a processing plant with a capacity of over one million litres per day at Baramati near Mumbai, and currently contract manufactures for companies like Nestle, Britannia among others. The technology to manufacture cheese has been provided by Schreiber Foods, USA, which holds a majority stake in the dairy firm.
Close on the heels of the Russian ban on import of dairy, meat and fish products from the EU, US, Australia and other nations coming to an end in August this year, the race to get approvals for dairy exports to that country has heated up here in India. The country's largest dairy player, Gujarat Cooperative Milk Marketing Federation (GCMMF) which owns the Amul brand, and was also in the race to export cheese to Russia, said that it is no longer keen on that market.
Talking to Business Standard, R S Sodhi, managing director of GCMMF said that the Russian market is not a very big one, and already several players were eyeing it since the ban. "We are no longer keen to pursue exports to Russia as it is not a very big market. As of now there are no plans to start exports immediately," he said.
GCMMF's reluctance might have stemmed from the fact that the period of the import ban imposed by the Russian government is nearing an end in August. Also, reportedly, Russia might allow a handful (15-20) of firms from countries like Hungary, Cyprus and Greece to return to its market after it lifts the embargo on food imports from the EU. While this is a very small number when compared to the original number of firms that were exporting food products to Russia from Europe (around 6,000 firms), it definitely hints at a re-entry of European firms who already have established market in Russia.
In addition to this, while the Federal Service for Veterinary and Phytosanitary Surveillance of Russia (Rosselkhoznadzor) has allowed Indian firms to supply dairy products to Russia, the firms are still awaiting a nod from the Commerce Ministry to be able to start exports. According to protocol undertaken by both the countries, even after the Russian authorities are satisfied with the plants, it requires an assurance certificate from the Indian counterpart, which in this case is the Export Inspection Council. Until that happens, the two dairy firms cannot start exporting.
Shah stated that they were ready at their end to start exports the moment the relevant approval from the Indian authorities came in. Parag is already in talks with several dairy players in Russia and expects the initial orders to be around 250-300 tonnes per month. Shah said the price of cheese would be determined by the international prices.
The international prices are ruling around $3,300-3,600 per tonne depending on variety, and the Russian market could fetch a higher value owing to the scarcity, a premium of about 10-15 per cent.
