Russia Buys Arabic Butter As Consumer Trends See Domestic Consumption Skyrocket

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Russia has begun to purchase butter from the United Arab Emirates (UAE), the first time it has imported the product from the country. Before, the European Union was a major source of the product, with 28% of all EU butter exports going to Russia.    

Russia began importing UAE butter on October 18, and in the two weeks to November 2, has imported 90 tonnes, according to the Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor).

Russia’s butter imports have also begun from Turkiyie, with an initial batch of 20 tonnes imported in the two days between October 27 and 29. As Russia diversifies its supply chains, consumer product sourcing is beginning to shift, and Russian consumer demand also now increasing. Russia has imported a total of 112,300 tonnes of butter in the period January-October, up 9% year-on-year.

According to Rosselkhoznadzor, 116 overseas butter producers are registered to supply Russia with the product. Of those, 97 of them, from 11 countries have supplied Russia with butter.

Part of the diversification drive is because Russian butter prices have risen 25.7% since the start of the year, according to Rosstat, with the rise in prices drawing significant attention from the Russian authorities. Deputy Prime Minister Dmitry Patrushev recently held two meetings on stabilizing the situation in the food and butter markets. At the second meeting, he gave instructions for daily monitoring of the food market and for exhaustive measures to be taken within two weeks to maintain stability. The reason for the increase is due to Russian consumer surges in Russian-made ice cream and cheese products, as the market shifts to domestic production as opposed to EU imports.    

Russia has proposed introducing a tariff concession for importing up to 30,000 tonnes of butter into Russia from the Eurasian Economic Union. Russia currently needs to import about 25% of its annual butter consumption, as Russian dairies adapt to new market conditions. The Russian butter market is worth about US$1.85 billion in annual revenues, with consumption expected to grow annually by 5.61%.

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