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Dairy Opportunities when Russia Joins WTO

24 April 2012

RUSSIA - Russia’s upcoming accession to the World Trade Organisation (WTO) will undoubtedly lead to increased market access and a boost in agricultural trade, says Emily Balsamo for the Irish Food Board in Moscow.

As a condition of accession, Russia has committed to reduce and bind import tariffs to all agricultural goods. The average tariff for agricultural products will be reduced from 13.2 per cent to 10.8 per cent. A new tariff rate quota will also be established to provide better access for modified whey.

As a member of the WTO, Russia’s new trade policy will obviate approval of suppliers, a process that has long been a market access barrier into Russia. However, EU suppliers will continue to face stiff price competition from the Ukraine and Belarus, neither of whom are subject to Russian customs duties.

Russia is also currently the world’s largest import market for butter, at $600 million. The top suppliers are the EU (40 per cent), Belarus (40 per cent) and New Zealand (15 per cent). Medium-term access gains due to WTO accession include considerable tariff reduction for butters, fats, oils and spreads. By 2014-5, Russia will reduce its current applied tariff rates of 15 per cent bnlt €0.35 per kg to a range of 15 per cent bnlt €0.12-0.35 per kg. For commercially important lines, the final bound rate will be 15 per cent bnlt €0.22 per kg in 2015.

Russia is the largest import market for cheese at $2 billion. At this time, 45 per cent of imports are from the EU, 30 per cent from Belarus and 20 per cent from Ukraine. Although importation from Belarus and Ukraine is greatly facilitated by the lack of customs between Russia and these two countries, the products are viewed as lower quality than those from Europe.

There is a sharp rise in interest and consumption of artisanal and foreign cheeses, such as mozzarella, emmental and maasdam. Although cheddar currently occupies a small share of the market, the changing interests towards foreign cheeses and Russia’s high consumption of hard cheese indicate potential opportunities for Irish cheeses, in the Russian market.

In light of this favourable trade climate, Bord Bia’s Russian office is planning a Dairy Forum in Moscow this September. Representatives from several Irish companies in addition to many Russian processors and distributors are expected to attend.

This event will coincide with World Food Moscow, which is attended by all leading dairy processors and distributors from Russia and the CIS countries. Participants in the Dairy Forum will have the opportunity to participate in a round table discussion as part of World Food Moscow.

TheCattleSite News Desk



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