OREANDA-NEWS. May 24, 2011. The problems on the Russian dairy market are caused by supplies from Belarus at dumping prices, the National Union of Dairy Producers, or SOYUZMOLOKO, said in its address to the Russian government.

“These are significant continuous supplies. They have become possible because of the devaluation of the Belarusian ruble by 70%. Financial analysts forecast 250%-300% ruble devaluation,” SOYUZMOLOKO Chairman of the Board Andrei Danilenko was quoted as saying.

He said the situation had a catastrophic impact on prices and volume of sales on the Russian market.

Inventories of Russian producers now stand at tens of thousands of tonnes of cheese, powdered milk and butter. The purchasing price of raw milk may fall below its product costs.

To rectify the situation, SOYUZMOLOKO suggests that Belarus should discontinue supplies of dry milk, butter and cheese to Russia until the balances for 2011 have been readjusted.

Also, it is proposed that only designated producers should supply their products to Russia and only via the Russian commodity exchange.

On May 16, agriculture ministers of Belarus and Russia held a videoconference to address the situation and decided to coordinate indicative prices for main dairy products on a weekly basis.

Belarus has undertaken to suspend export of dry milk whey and full cream powder to Russia.