Dairy Market Overview of Russia

Russia, known for its diverse and vast agricultural sector, plays a crucial role in the global dairy market. The country is experiencing substantial transformations and investments in its dairy industry, particularly with notable events such as the exit of Danone and the entry of Vietnam's TH Group.

Dairy Cattle and Milk Production

As of 2023, Russia boasts approximately 8.2 million dairy cattle. This substantial herd contributes to a significant volume of milk production, with estimates indicating an annual output of around 31 million tons of milk.

Milk Processing and Cheese Production

The milk processing industry in Russia is well-developed, handling about 21 million tons of milk annually. Cheese production is a vital segment, with annual cheese production volumes reaching approximately 1.1 million tons. Additionally, Russia produces around 1.6 million tons of milk powder and whey each year.

Key Dairy Enterprises

Major Dairy Plants

• Moscow Dairy Plant
• St. Petersburg Dairy Combine
• Udmurt Dairy Complex
• Krasnodar Milk Processing Plant
• Irkutsk Dairy Plant

Leading Dairy Farms

• Miratorg Agribusiness Holding
• Efko Group
• Rusmolco (Russian Milk Company)
• Eridan Group
• Agrocomplex named after N.I. Tkachev

Export and Import of Dairy Products

In 2023, Russia exported about 800,000 tons of dairy products, while imports stood at approximately 1.2 million tons. The trade balance reflects Russia’s growing capabilities and demand in the dairy market.

Significant Events

• Danone’s Exit: On March 22, 2024, Danone announced that it had received regulatory approvals from Russian authorities to sell its assets in Russia, incurring an estimated loss of €1.2 billion. This exit is a significant reshuffle in the Russian dairy landscape.
• TH Group’s Entry: Vietnamese dairy company TH Group has announced its plans to launch a dairy plant in Russia with a processing capacity of 1.5 thousand tons per day, marking a $204 million investment in the Russian Far East. This move signifies a notable foreign investment and expansion in Russia’s dairy industry.
• Unilever Acquisition Approval: The Federal Antimonopoly Service (FAS) of Russia has given the green light for the acquisition of Unilever Rus, the Russian subsidiary of Unilever, by a Russian company. Unilever will sell its business in Russia for approximately $340-450 million.

Additional Market Insights

With these developments, Russia continues to fortify its presence and evolve in the global dairy market, driven by substantial domestic production, significant international investments, and transformative industry events. EkoNiva’s dairy products are now available in 70 regions across Russia.

In February 2022, Unilever warned of the risks of ceasing operations in Russia but did not plan to leave the market and was looking for ways to continue its work. Russia is a key growth market contributing to the rising demand for camel milk. Export of butter to Russia from Kyrgyzstan increased by 18% in the first 7 months of the year. Prices for Skimmed Milk Powder in Russia continue to rise, with traders expecting further increases. A record 82.5% rise in butter prices in Russia halted. In September 2024, after a sharp rise, prices for 82.5% butter in Russia stabilized at 960-970 rubles/kg.

The Russian dairy industry may face a serious shortage of raw materials in the coming years, according to Artem Belov, CEO of the National Milk Union (Soyuzmoloko). At a meeting during the 'Dairy Country-2024' festival in Ufa, he noted that the consumption of dairy products in Russia is growing faster than the supply of commercial milk, which puts pressure on prices. Exports to Russia amounted to 234.7 tons valued at $1.28 million, while there were no exports to Russia during the same period in 2023.

Modified: 2024/10/09

---