Dairy Crest is tipping that Russia will become one of its biggest export markets for Cathedral City following the country’s accession to the World Trade Organization.
Russia joined the WTO on 22 August, pledging to reduce average import tariffs on agricultural goods from 13.2% to 10.8% and on dairy from 19.8% to 14.9%.
Germany is currently Dairy Crest’s largest export market for Cathedral City, but the company predicted Russia’s WTO membership would boost exports to the country and build on the first listings it gained with major supermarkets in Moscow and St Petersburg in January.
“Operating in this market is not without its challenges and we are hopeful that Russian accession to the WTO will reduce these so we can unlock the opportunity in the market,” said international sales manager Simon Bradley.
Consultant Hamish Renton predicted that hard cheese such as Cheddar would become more competitive to export to Russia.
“There will be a market for that at the top end,” he said, adding that dairy powders would also be of interest in the Russian market.
Defra said it had been encouraging British dairy companies to make the leap and take advantage of Russia’s potential as an export destination. “Once Russia’s adjusted its administrative processes accordingly it will be much easier to secure certification of products,” a spokesman said.
However, agri-investor Rabobank warned that although WTO membership should allow UK processors greater access, Russia remained a difficult market to penetrate. “Our sources suggest there are still non-tariff barriers to overcome when shipping to Russia,” said senior EU dairy analyst Kevin Ballamy.
In 2011, UK food and drink exports to Russia totalled £105m [FDF].