Unfortunately, the reinstatements exclude butter, which historically has been the industry’s largest export to Russia.
The Russian veterinary service Rosselkhoznadzor said on Monday it would allow the resumption of imports of anhydrous milk fat and whey and milk protein concentrates from 29 previously suspended sites.
It said the reinstatements followed an analysis of materials provided by officials in Wellington to the Moscow-based agency which blacklisted the plants in the aftermath of Fonterra’s 2013 botulism scare.
Dairy Companies Association executive director Kimberly Crewther said dairy exports to Russia from NZ had fallen since the plant suspensions although she could not say precisely by how much.
She said it would be difficult to restore the trade to its former levels until restrictions on butter and other important products were lifted.
“The plants have been taken off suspended status but for a limited range of products…it is a limited relisting.
“We assess it as a first step in the right direction for normalising the trade.”
In September 2013 the Ministry for Primary Industries said 61 of the 81 dairy factories with licences to export to Russia were “temporarily” suspended following the botulism scare the month before.
Only Fonterra factories were affected.
Crewther said Fonterra had not requested a lifting of the suspensions for all 61 factories because some of them were not actively exporting to Russia even before the restrictions were imposed.
Some dairy companies remained shut out of the market following the latest announcement but they were smaller processors with plants that had not been licensed before 2013.
Crewther said Fonterra had been successful in getting all of the plants it wanted relicensed.
This week’s progress came as pressure mounted on dairy companies to do everything possible to turn around a collapse in milk payouts to farmers forecast for the 2014-15 season.
The slump wasd compounded by a separate decision by Russia last August to ban food imports from the United States, Europe, Australia and others in retaliation for sanctions imposed by the West following the invasion of Crimea by Kremlin-backed forces earlier in the year.
Produce formerly destined for Russia – one of the world’s biggest food importers – flooded global markets and combined with a sharp decline in demand from China put the skids under dairy prices.
Noting that NZ was not on the list of banned countries Trade Minister Tim Groser in September last year asked primary exporters not to exploit any increased demand from Russia and to maintain normal trade.
But the separate suspensions of plants meant the dairy industry was struggling to even do that and representations were made to the Government by the association late last year to re-engage Russian officials and get the factories back online.
That request was understood to have met with resistance from some Government ministers who feared upsetting trade talks with the United States through the Trans Pacific Partnership and also with the European Union.
It was not until May this year – with dairy prices in freefall – that the Government dispatched MPI officials to talk to their Russian counterparts about getting the plant suspensions lifted.
Association chairman Malcolm Bailey said the industry had no intention of ramping up trade with Russia as a result of the latest reinstatement of licences or any future relaxation of market access conditions.
“The important thing is that all we want to do is get trade back to where it was. We do not want to do anything extra.
“We do support the Western alliance, if you like. It is to normalise things to where they were.”
