Dairy crisis forecasts in Russia are greatly exaggerated – Ministry of Agriculture
Russian dairy sector is not as close to a crisis as producers claim it to be, believes the country’s Ministry of Agriculture. The institute forecasts that the current price for raw milk hike won’t lead to deficiency. Nevertheless dairy prices are likely to continue growing and to affect both rich and poor social groups, but in different ways.
Raw milk price increase shouldn’t be treated as a market disease sign, though consumption is currently exceeds production, says Vladimir Labinov, head of the Department of Animal Husbandry and Breeding at Russian Ministry of Agriculture. The expert stresses that raw milk price growth amid demand increase – is a usual process which drives the market development. A bad sign for the market is when the price growth is accompanied by a demand fall. Mr. Labinov is sure there is no ground for panic.
Industry representatives meanwhile warn about milk price growth acceleration. According to Andrey Danilenko, Chairman of the Board of Directors of the National Dairy Producers Union, volumes of milk production are decreasing very quickly, the processors started repurchasing milk suppliers, competition is increasing. As a result raw milk prices are growing faster than ever – since the beginning of the year it grew by 25%. The first product to increase in price – is fresh liquid milk, says the union’s representative. Retail prices for dairy products will increase by 10-15%, according to Mr. Danilenko forecasts.