Belarus makes concessions to the Russian dairy lobby

The Russian National Union of Milk Producers (“Soyuzmoloko”) on February, 20 published an open letter addressed to the Russian Ministry of Agriculture and the Minister of Agriculture and Foodstuffs of Belarus Mikhail Rusoy requesting to regulate the relationships between the two countries in the diary market immediately. “Soyuzmoloko” informed that the selling prices recommended by the Ministry of Agriculture of Belarus for the Russian market were “disastrous”.

“Soyuzmoloko” proposed to delete full cream milk powder and whey powder from the list of dairy products supplied by the Belarusian enterprises to Russia until the end of 2012, making appropriate adjustments to the balance of trade. The organization also believes it is necessary to increase the indicative prices for imports of butter and skimmed milk from Belarus. Regardless of such obvious protectionism, Belarus did not step into the battle field. On 21 February the Deputy Minister of Agriculture Elena Skrynnik reported, that the proposed foods could not be removed from the balance due to the fact that the principal issues of cooperation within the Customs Union have already been agreed upon. However, Belarus confirmed its readiness to adjust the indicative prices and supply volumes of dairy products to the Russian market immediately in order to prevent oversupply and dumping of the market.

Therefore the emerging conflict was immediately extinguished by loyalty of the Belarusian side. Belarus has demonstrated its willingness to have a dialogue. It implies that the leadership is not ready for a following round of trade wars, thereby confirming weak positions of Belarus in the CES and in the CU and its dependence on the goodwill of the Russian leadership.