Brazil begins dairy exports to Russia

Brazil begins dairy exports to Russia
Three so-far-unnamed Brazilian dairy companies have received the proper paperwork to start deliveries to Russia, a representative of the Brazilian Ministry of Agriculture said. The new imports will help fill a gaping hole left by EU suppliers.

One of the companies has already started deliveries, Marcelo Junqueira, secretary for international affairs of the Brazilian Agriculture Ministry Marcelo said, ITAR-TASS reported.

The new deliveries will help fill the 57 percent gap of imported dairy products after Russia introduced a one-year food embargo in August on certain agricultural products from the EU, US, Australia, Canada, Australia and Norway.

The move is symbolic of the strengthening political and economic ties between Brazil and Russia as relations with the West continue to sour over the Ukraine crisis.

"Brazil is known for its high level of sanitary control, we supply meat to more than 100 countries and poultry to 155 countries, so it is natural that a major importer [Russia] came to us,” Junqueira said, as quoted by ITAR-TASS.

READ MORE: Russia’s import ban means big business for Latin America

Last week the Brazilian delegation, comprised of 37 private companies, attended the Moscow International Exhibition of World Food. Over $106 million in contracts were inked, Junqueira said, without disclosing which companies.

In 2012, the turnover of trade between Russia and Brazil reached $5.9 billion. Brazil plans to import fish and grains from Russia.

In August, the Brazilian Ministry of Agriculture began a registration process allowing companies to be authorized to export to Russia. At the same time, the Kremlin approved 89 Brazilian companies to sell dairy, meat, and other products in Russia, a number which has since grown to over 130.

Before 2011, Brazil was the number-one meat supplier to Russia, but lost market share after Russia’s consumer watchdog, Roselkhoznadzor, banned the import of meat from the country. The ban was lifted on August 18.

In the past, Russia has been a big importer of Brazilian butter, but Brazil hopes to sell milk and milk powder to Russia.

Brazil already has a large domestic dairy market, and it may be hard to convince some farmers and distributors that it is better to send the product abroad. However, Russia’s weak currency favors the seller, and not the buyer.

Since the embargo was set, Russia has held talks with several countries - China, Turkey, Serbia, Egypt, Mauritius, Ecuador, Chile, Columbia, Mexico, Sri Lanka, Paraguay, Guatemala, Morocco, Kenya, Argentina, Lebanon, the Faroe Islands, and of course Brazil - about increasing agricultural exports to Russia.