Tuesday, December 18, 2018
 FrieslandCampina Searching For Alternative Markets After Russian Boycott  

Russia’s boycott of dairy products from the EU and other areas is having an impact on the European dairy sector, leaving companies like FrieslandCampina to search for alternative markets.


In 2013, FrieslandCampina exported products worth approximately 190 million euros to Russia and now they are taking measures to mitigate the direct consequences of the Russian boycott as far as possible. Cheese production specifically for the Russian market has been suspended. The cheese that cannot now be exported to Russia has for the most part since been sold in other markets. However, to mitigate the medium-term impact as far as possible, too, FrieslandCampina is investigating alternative sales markets. More milk powder is being produced to relieve the cheese market.

The dairy products intended for Russia will have to be sold elsewhere on the European and global markets. This market distortion places extra pressure on the dairy market. The selling prices for milk powder and butter were already under pressure owing to the declining demand on the global market and the consistently high milk supply in 2014. 


FrieslandCampina is in close contact with the NZO (Dutch Dairy Organisation), the EDA (European Dairy Association), LTO Nederland (the Dutch Federation of Agriculture and Horticulture) and the Dutch Employers’ Federation VNO-NCW to explore all the options to mitigate the impact on the dairy sector and the dairy farmers as far as possible. Currently, market prices are still far above the EU intervention levels, so this support will not be used. Governments can, however, support the dairy sector to look for new markets by removing trade policy obstacles.


In the long term, the prospects for dairy are good owing to the growth of the global population and the increasing demand for nutrient-rich food as a result. FrieslandCampina has important sales markets for various product categories, such as dairy drinks, infant nutrition, cheese and ingredients for the food and pharmaceutical industry in Europe, South-East Asia, the Middle East and West Africa. Globally, cheese and other dairy products are exported to more than 100 countries. As stated, owing to the increasing market dynamics and the absence of EU support of the dairy market, the selling prices and therefore the milk prices, will be more volatile for farmers. FrieslandCampina has a buffering effect for its members because of its wide product range and the large geographical spread of its operations.


Source: FrieslandCampina

Posted on Thursday, August 28, 2014 (Archive on Thursday, September 04, 2014)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org