Local, not Russian, approvals holding up export of cheese

Attempts by private dairy firms Parag Milk Foods and Schreiber Dynamix Dairies to export milk products to Russia have got tangled in red tape at home.

The facilities run by the two Indian firms got approvals from Rosselkhoznadzor, Russia’s federal inspection agency, on April 23 to sell hard cheese, but are still waiting for ‘assurance certificates’ from the Indian establishment, a requirement put by the Russian authorities.

A Commerce Ministry official told

BusinessLine that while Russian authorities had expressed satisfaction with the plants, an assurance had been sought that the milk used was free of contaminants that could lead to foot-and-mouth disease. “They would probably be satisfied with a certification from the Export Inspection Council, which has to be worked out,” he said.

According to Rosselkhoznadzor, the current status of export licences of the two companies fell under the ‘suspended certification’ category, which meant “…that export of regulated goods from that plant (are) currently suspended (pending) notification of the competent authority of the exporting country”.

“It’s a protocol undertaken by both governments and it’s the only thing pending right now. We are an approved identity from the Russian side but this assurance needs to be cleared and sent to them for exports to begin,” said Shishir Upadhyay, Senior Vice-President (Strategic Planning), Parag Milk, which markets its products under the ‘Gowardhan’ brand.

Time running out

Importantly, with the Russian ban on imports of Western food products set to expire on August 7, the Indian exporters fear that the delay might derail their chances to tap into a lucrative market at a time when global dairy product prices have declined and exports have slid.

“The ban will run out soon, already cheese from the EU is entering through backchannels since quality products were missing. It will take us three months to set things up and the products have to be on the shelves for at least a month for demand to be generated,” said Upadhyay.

Industry estimates peg Russia’s cheese market at 2.9 lakh tonnes (lt) of which 2.5 lt is supplied by the EU. With shipments drying up after the ban, it presented a significant space for India’s dairy firms, including large players like Amul. Parag Milk, which has tied up with nine players, estimates orders to be between 300-500 tonnes per month. International prices rule at $3,000-3,700/tonne according to the type and quality.

“For Russia, there may be a premium of 5 to 15 per cent depending on different verticals,” Upadhyay added.