Russia turns to UAE, Turkey for butter imports amid soaring domestic prices

RUSSIA – Russia’s demand for butter has seen a significant shift as the country begins sourcing the product from the United Arab Emirates (UAE) and Turkey in response to rising domestic prices. 

Rosselkhoznadzor, Russia’s Federal Service for Veterinary and Phytosanitary Supervision, announced that as of November 2, Russia had imported 90 tons of butter from the UAE. 

This marks the first time that butter shipments have been delivered to Russia from the UAE, signifying a new supplier in the Russian market.

Butter imports from Turkey also commenced in late October, with 20 tons shipped between October 20-29. 

Combined, these new sources reflect an expanded import network as Russia works to offset the impact of inflation. 

According to Rosstat, the national statistics agency, butter prices in Russia have surged by 25.7% from January through late October, raising concern among consumers and prompting officials to address the price escalation. 

Deputy Prime Minister Dmitry Patrushev has led recent government meetings to monitor and stabilize prices, which now involve daily assessments of the food market. 

To further curb rising prices, the Russian government proposed to the Eurasian Economic Commission (EEC) a tariff concession allowing up to 30,000 tons of butter imports with reduced tariffs. Currently, the base duty is set at 15%, or no less than 0.22 euros per kilogram.

Russia’s butter imports from other regions have also remained active. 

As of October 29, Russia’s cumulative butter imports for 2024 reached 112,300 tons, a 9% increase over the same period in 2023. 

Import origins have traditionally included South America, with recent shipments totaling 2,800 tons from countries like Argentina and Uruguay, despite declining supply from these markets since 2014, primarily due to logistical issues, sanctions, and disrupted business agreements, according to Rosselkhoznadzor. 

At its peak in 2014, South American butter imports to Russia amounted to 25,000 tons.

Despite being the world’s 19th largest butter importer, Russia remains an exporter as well, ranking 39th globally. 

In 2022, Russia exported butter primarily to Kazakhstan, Kyrgyzstan, and Azerbaijan, with exports reaching US$10.2 million. 

On the import side, Russia sources butter predominantly from Argentina, Kazakhstan, Uruguay, New Zealand, and Armenia, with a total import value of US$163 million in 2022.

The ongoing geopolitical challenges and sanctions against Russia, especially in the wake of its invasion of Ukraine, have caused a surge in butter prices in the country, reportedly rising by 25.7% as of late October. 

This spike reflects the broader inflationary pressures on consumer goods across Russia, where even essentials like dairy have been affected due to resource allocation prioritizing military production over consumer supplies.

According to Russian sources, as sanctions tighten, President Putin’s promise that Russia could focus on “both guns and butter” is proving more challenging. 

Despite reassurances, the situation on the ground tells a different story: butter has become both costly and a target of supermarket thefts, while other foods like lamb and milk have also seen substantial price increases. 

In response, Russian authorities have started to engage with dairy producers to explore options for controlling price hikes, though any effective solutions remain to be seen. 

The impact of these price surges demonstrates how domestic policy and international sanctions intertwine to influence Russia’s economic landscape, posing challenges for both the government and Russian consumers.

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