Russia. The difficulty of milk exports

Russia has signed protocols on the supply of dairy products and chicken meat to China. The Ministry of agriculture expects that the first deliveries of dairy products will be carried out this year. “Do Russian producers really want it?” tried to understand The DairyNews.
- We have done a lot to ensure access of agricultural products to the Chinese market. During the visit to China there were reached agreements in accordance with which domestic producers have the prospect of exporting a number of animal products. We expect that the first deliveries will take place this year", – said the Minister of agriculture of Russia Dmitry Patrushev.
In accordance with the documents signed by the Rosselkhoznadzor and the Chief customs department of China, export opportunities appear for Russian poultry farmers, producers of cow, goat and sheep milk, as well as products made of it.
As the head of the Ministry of agriculture of Russia noted, the Chinese market is one of the priorities for the development of domestic exports. The work of the Ministry aimed at ensuring and expanding access of Russian agricultural products to China will continue and will allow increasing significantly the volume of bilateral trade between the countries in the future.
It should be reminded that to start carrying out of deliveries, Russian companies must be registered at the State administration for quality control, inspection and quarantine of the People's Republic of China (AQSIQ). This can be done on the official website: The registration and approval of the State administration for certification and accreditation of the PRC is also required.
However, these are not all obstacles for carrying out the export of dairy products to China. The most significant is the intense competition with the giants of the dairy market and logistical problems.
Even before Russia imposed the embargo in 2014, China remained a key market for countries exporting dairy products. After the embargo, its role has increased.
It’s worth reminding that the target dynamics of exports of dairy products from Russian enterprises according to the Ministry of agriculture, suggests an increase in supplies of the category outside the Russian Federation up to 1.8 million tons (in terms of raw milk) by 2024. According to 2017, exports amounted to 700 thousand tons (in terms of raw milk). The bulk of deliveries are made to the CIS countries – there are exported mainly fermented dairy products, cheeses, cheese products and cottage cheese. One should remember that today Russian enterprises can supply ice cream to China, this product is so popular in China that it is subjected to mass copying. But even taking into account the falsification and copies, the Chinese party is ready to buy dairy products and ice cream in large volumes, exceeding the capabilities of many border enterprises. For the rest of the manufacturers the question of the logistics is not resolved yet.
- It is important to take into account the fact that consumers in our countries differ in taste preferences, peculiarities of perception of products and brands, etc. To succeed in the Chinese market, domestic companies need to study it, and this requires investment. Therefore, in the next two years, the volume of supplies of dairy products to China will be relatively small, she concludes. And only those enterprises that will be able to adapt quickly to new challenges in the growing Chinese market will be able to develop exports to China, taking into account how quickly Chinese companies develop, copy and improve products, - said Marina Petrova, CEO of Petrova Five Consulting in a comment to “Agroinvestor”.
Igor Pekhotin, the head of the group "Molochny kit" in an interview with The DairyNews stressed that Chinese businessmen are interested in the Russian dairy products. However, they also see problems with logistics, which significantly reduce the competitiveness of food products. There is a demand in China, said Pekhotin, however, it is worth remembering that there is not so much milk in Russia.
- We are in the center of Russia and from this point of view our area of supply is Sverdlovsk region and the Urals. If we talk about exports, I can say that we are working on the development of this area of the company's activities, but one way or another we are talking about a small share in the total output. I am convinced that it is necessary to export not raw materials from the country but surpluses of products of processing. But today the situation is the opposite: there is a deficit of 25-30% in the region. Therefore, I still do not fully understand what exports can be discussed? Export material number one in Russia now is grain, we have it in excess. The export of products that are not enough means higher prices for such products within the country. And this year in Russia in general prices for dairy products have increased, despite the fact that demand has decreased. The appeared falsified products, - expressed his opinion the head of "Molochny kit".
The Bryansk company "Umalat" is also considering the possibility of exports to China. Today, the manufacturer of soft cheeses exports about 5% of the total production volume.
- China is a very dynamic country in terms of legislation. If we talk about logistic problems, I believe that the state has already done its work in terms of the decision to open the borders. If there is a permit, the rest are managed by the company, including logistics and assortment. The state should give the go-ahead, all the rest are the responsibilities of companies, said Alexey Martynenko, General Director of "Umalat".

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