Belarus becomes creative in order to fulfill Russia’s void in dairy products and still meet domestic demand.
Since last August, Russia—a nation of 143.5 million people—has looked to Belarus, a small landlocked country in Eastern Europe, to fill a large share of its dairy needs. A country of 9.5 million people, Belarus declared its independence from the Soviet Union in 1990. While many in the dairy industry expected Belarus to supply Russia with more dairy products in the wake of the Russian import ban on dairy products from the EU-28, the United States, Australia, and Norway, no one knew just how creative the small nation would be.
“Russia is unequivocally Belarus’ largest dairy trade partner, accounting for more than 70 percent of total exports during the past two years,” says Sara Dorland, analyst with the Daily Dairy Report and managing partner at Ceres Dairy Risk Management, Seattle. “Last year Belarus increased year-over-year milk and dairy product exports to Russia by 5.6 percent to 724,000 metric tons.”
In the first half of 2014, milk production in Belarus slipped 1.65 percent below the first six months of 2013. Despite contracting milk production in early 2014, Belarus was able to meet Russia’s additional dairy demand by enlisting the help of EU member states.
“Through purchasing additional dairy products from other Eastern European nations, namely Lithuania and Poland, Belarus was able to keep its largest customer happy,” notes Dorland. “However, easing dairy demand from Russia could be slowing Belarus’ need to backfill domestic dairy products with product from Europe.”
In the second half the year, milk production in Belarus climbed 3.7 percent above the comparable period in 2013, and the gains have only accelerated this year. In January, milk production in Belarus soared 3.5 percent above 2014 levels to 521,800 metric tons, up a strong 9.6 percent from December levels. Stronger output is expected to give Belarus the means to continue filling additional Russian dairy demand without having to rely on imports.
“Russia’s ban on dairy products likely tightened the domestic milk and dairy product supply in Belarus, which forced the country to import more dairy products to fulfill sales to Russia,” says Dorland. Between August and December 2014, Lithuania and Poland exported 40,687 metric tons and 24,844 metric tons of milk and cream, respectively, to Belarus. For the same period in 2013, exports to Belarus from these countries were virtually nonexistent. EU-28 cheese exports to Belarus rose dramatically between August and December 2014 to 3,125 metric tons, up a phenomenal 444 percent compared with the same period in 2013.
“With Belarus milk production on the upswing, Lithuania’s and Poland’s exports to Belarus could ease in 2015, and that would make more product available on world markets at a time when prices are relatively depressed,” says Dorland.
Russia’s ban on dairy products from many of the world’s largest exporters is slated to run through July 2015.
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