India's proposal for dairy exports to Russia in a limbo

Russia's phytosanitary watchdog seeks details of milk production data along with quality mechanism adopted by Indian plants

Indian dairy exporters’ wait continues for dispatching their first shipment to Russia.

R S Sodhi, chairman of the Gujarat Cooperative Milk Marketing Federation (owner of the Amul brand), said: “The Russian government has not yet approved dairy import from India. Our talks with Russian importers are still on.”

A team from Russia’s phytosanitary watchdog, Rosselkhoznadzor, had visited India between October 27 and November 8, 2014, to inspect at least half a dozen cheese and dairy product units. They were reportedly satisfied at the progress on good manufacturing practices.

“We have sent our dossier of reports to the Russian authority on the quality of dairy products and other issues they had raised. We are yet to receive any positive signal,” said S K Saxena, Director, Export Inspection Council, the body monitoring shipment of dairy products. “We are confident of getting Russian market access very soon.”

The Agricultural & Processed Food Products Export Development Authority has been following the matter.

“There has been no response from the Russian authority as yet,” said Santosh Sarangi, its chairman.

The Food and Agricultural Organization of the United Nations estimated a 13 per cent decline in Russia’s import of milk and its equivalent, at 4.35 million tonnes in 2014 as compared to 5.01 mt the previous year. This was due to the ban, from August 2014, on export of dairy products from Australia, Canada, the European Union, Norway and America, due to the trade sanctions imposed in the wake of the Ukraine crisis.

In 2013, India entered the world market for skimmed milk powder (SMP) in a significant way, with sales leaping 250 per cent to 130,000 tonnes. Trade data for the first eight months of 2014 show exports down 37 per cent compared with the same period in 2013. Our SMP exports are estimated to have declined by 50 per cent in 2014, to 64,000 tonnes. World prices have been falling, making domestic sales more profitable. Additionally, as a consequence of rising internal prices, the Government of India announced in July the abolition of an earlier five per cent SMP export incentive.