Russian import barriers: EU dairy market strongly affected

Russia import lock: EU dairy industry serious challenges, but also Russia.

After years of high milk prices, a significant weakening of the courses in the milk sector draws on worldwide. The biweekly auctions of the global DariyTrade in New Zealand have since beginning of the year had recorded a decline by 45%. With China and Japan, Russia is one of the largest importers of dairy products. Especially cheese, butter and SMP are front. The EU's share of the Russian import is approximately 29% for butter and cheese 33%. However there were already restrictions on milk product imports from the EU from actual or advanced veterinary reasons in advance.

A full Russian lock could put in addition the EU milk market currently above-average growth after the recent price cuts in the milk sector under pressure. Relative to the year 2013 rd. 255,000 tonnes of cheese and 30,000 tonnes of butter would have to by the EU as well as 20,000 t MMP are otherwise accommodated. That will not remain without consequences for the EU dairy industry. The forward prices for butter and milk powder on the Frankfurt Stock Exchange have fallen considerably in a first reaction.

Extent to which Russia capable of import failures at the dairy products from the EU by replacement imports from other countries to compensate for, must be due to the limited possibilities in doubt. The world's major production centres EU, United States are excluded. India as a major producer of 80 million tonnes of cow's milk is self catering with fresh milk and only occasional MMP sales on the GDT auction.

Argentina's dairy industry a product that has no significant market in Russia is fixed in terms of the exports mainly on whole milk powder. The Argentine export total of 52,000 tonnes of cheese is not enough to replace the EU failure. Argentina's financial weakness has led to declining developments in the dairy sector. Brazil dairy industry is busy with the domestic supply. Exports of dairy products play a role completely.

Remains still in New Zealand as the world's largest exporter of dairy products. However, the New Zealand milk quantity with 21 million tonnes reached No 5% of world milk production. In comparison, the EU approximately 90 million tonnes produced approximately 150 million tons and the United States. Alot for Russia's import demand to offset export can not be done with an increase in the production of New Zealand, but at most by a cut-throat competition. The 14-day Internet auction the global dairy trade could be a platform for Russian purchases. In the bidding, Russia should be in 1. Join the line against the booming China. One can imagine bidding duels with high auction price surcharges.

Should China not come fully to the course, it will look despite big distance of market in the EU and the United States. China's import demand mostly consists of whole milk and skimmed milk powder. The United States are powerful MMP exporters, but hardly the whole milk powder. The Chinese consumption and import of cheese is still in its infancy, but it is conceivable that the Chinese potential is big enough to buy a significant portion of Russia failure of the EU.

To what extent the recent Melaminskandal in Chinese yoghurt batches triggers a renewed surge in Chinese imports, is not manageable. In any case, German and European dairy products enjoy a good reputation in China.

You can assume that a substantial portion is being done blocked imports of dairy products at high prices by consumption of Russian consumers . The Russian pork market provides a good example with price increases up to 75% for months, absence of replacements.

A certain tension consists that operated the GDT auction in addition to other 2 American and 3 European providers . This applies in 1. Line the sector of skimmed-milk powder. From Sept. 2014 also the Northern dairy will occur Ammerland with butter milk powder as a provider.

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