Russian dairy market

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Russian dairy market
SMP market 2008 Russia
Belarus
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Overall Russia Dairy Info

• Area 17.1 mln. Sq. km
• Population 144 mln.
• Dairy market volume
• Consumption 250 kg/year per person - 35,5 mln.
  MT
• 22 bln. USD (2007 f)
• Local Production Local Consumption
• Raw milk - 31,7 mln. MT 35,5 mln. MT
• Butter 280 th. MT 400 th. MT
• SMP 115 th. MT 170 th. MT
• FCMP 75 th. MT 100 th. MT
• H.Cheese 300 th. MT 520 th. MT
• Whey 28 th. MT 65 th. MT
• Imports Cheese, Butter, SMP, FCMP, Whey
• Import volume 1.3 bln. USD (2007)
• 
  

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Dynamics of raw milk production in RF
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EUR/USD
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Row milk price dynamics in RF 2004-2008.
(Dairy Union RF)
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Comparative numbers in SMP producing EU/RF

• Without class level of row milk
• (21) ( 2 mt SMP 1 mt butter 82,5) approx.

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• SMP

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EU SMP production
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Average SMP Price 1998-2008, USD/??
Price dynamics and statistics.
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Sources EUROSTAT , Global Trade Informations
Services Geneva.
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Byelorussia

• Local Production 2007
  2008
• Raw milk 4.8 mln. MT ( f 5 mln. MT )
• Butter 69 th. MT
  72 th.MT (f)
• SMP 72th. MT
  75 th.MT (f) (55
  th.MT 8 mnths)
• FCMP 37 th. MT
• Cheese 66 th. MT
• Whey 10 th. MT
• Casein 12 th. MT
• 2007 Production of raw milk increase to
  11
• Production( of SMP increase to
  20 !
• Export SMP( 62 th. MT) increase to
  25 !
• 2007 - export to RF 32 th.mt
• 2008 (8) - export to RF 28 th.mt

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Belarus SMP prices
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Belarus SMP export 2007
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Import SMP RF
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SMP balance 2008

• Local production 8 months ( 9)
• Import 8 months 36 th.mt (LY 43 th.mt)
• Local consumption SMP dropping 10 (15 th.mt)
• New Reglament issue - ???
• Huge stocks in Belarus ( 20 000 mt) market
  under pressure

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Macro economical factors

• Credit rate issue 16-20
• Finance access issue
• Expensive fuel/energy (producing/processing cost
  to high)
• In results jump of price dropping consumption
  (15 )
• World market price reduction (import price go
  down)

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Row milk/SMP cost balance

• 2 mt SMP 1 mt butter (82) 24 mt row milk
  (3,4 fat/3,0 protein)
• 1 mt SMP (Belarus) 2100usd 58 000 rbl (VAT
  incl) 2000 rbl fright 60 000 rbl
• 1 mt butter ( Belarus) 3250 usd 92 000 rbl
• Row milk ( 602 92)/24 8,8 rbl/kg (incl VAT)
  cost of processing 9,5 rbl/kg
• World market still go down !

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Current market prices

• USA NFDM spot 2800 usd , whey spot 400 usd
  
• KKAI Japan 2670 usd (Q1),whey 470usd
• EU SMP spot 1830 Euro whey 400 eu
• Ukraine 2350 usd 12 000 mt stocks)
• Belarus - 2100 usd 20 000 mt stocks)
• Russia - 69-70 rbl

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Perspective

• World price lt 2500 usd (whey protein balance
  formula)
• Belarus lt 2000 usd (1750 ?)
• Russia lt 60 000 rbl
• Row milk / SMP price balance lt 8,5 rbl

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Available solutions

• Customs duty increase ? - NO
• Close Belarus milk for import ? NO
• Subsidies for milk producers ?..
• Fuel subsidies for milk producers ?..
• ( 35-40 cost of milk is fuel/energy
  expenses)
• Exchange rate usd/rbl