Dairy Export to Russia Turns Sour in 2011
Exports of Estonian dairy products to Russia were down by 40 percent last year compared to 2010, mainly due to competition from Belarus.
While two years ago Estonian producers exported 56 million euros worth of dairy goods to their eastern neighbor, in 2011 the figure stood at a modest 35 million euros, Eesti Päevaleht reported.
The drop in figures is mainly linked to a new customs union established between Russia and Belarus that removed all customs barriers between the two nations as of July 2011, creating favorable conditions for Belarus to boost its eastward exports.
“Belarus is in our way, because it increased its milk export to Russia, devalued its currency at a frantic pace and now enjoys the tax benefits that come with the union,” said Jaanus Murakas, head of the dairy company E-Piim. He added that Belarus is now covering most of the demand that would otherwise have fallen on the shoulders of Estonian producers.
Nevertheless, Murakas said he hopes that Russia’s accession to the World Trade Organization last December will eventually even out the trade conditions in favor of Estonia.