Russia Extends Zero-Tariff Butter Imports to Ease Food Prices
In a move to stabilize consumer food prices and mitigate inflation, Russia’s Ministry of Economic Development has announced an extension of the zero-tariff quota for 25,000 tons of butter imports until December 31, 2025.
The tariff exemption will take effect starting June 16, 2025, and will cover butter exclusively used in the food industry, as verified by the Ministry of Agriculture. This restriction is intended to prevent market abuse or misallocation of imported butter.
Regulatory Measures to Support Domestic Food Security
The exemption was approved by Russia’s Subcommittee on Customs, Tariff, and Non-Tariff Regulation to support domestic price controls on essential food items. Authorities emphasized that the measure is not expected to harm local dairy producers, as the imported volume represents a marginal share of Russia’s domestic consumption and is specifically regulated.
According to the Russian Federal Customs Service, Russia imported approximately 34,000 tons of butter in 2024, primarily from Belarus, Argentina, and Uruguay. The extended exemption allows duty-free imports of a designated portion (25,000 tons) to ensure affordable supplies for processors and reduce pressure on consumers.
Market Context and Trade Outlook
Global butter prices remain volatile due to supply-chain disruptions and production fluctuations in key exporting countries like New Zealand, Ireland, and Germany. Russia, a significant butter producer in its own right, aims to balance local production with targeted imports to avoid price spikes.
In 2024, Russia’s domestic butter production reached 280,000 tons, with leading producers including Ekoniva, Milkom, and Wimm-Bill-Dann (a PepsiCo subsidiary). The average CIF price for imported butter was around $4,300/ton.
The continuation of the tariff exemption is part of a broader price control strategy in response to global food price inflation, driven by supply shortages, export restrictions, and currency fluctuations.
Russia’s butter market experienced significant shifts in 2024, marked by increased imports and strategic policy adjustments to stabilize domestic prices.
Import and Export Overview
Imports:
- Russia’s butter imports rose by approximately 9.8% in 2024, totaling around 134,700 tons.
- Belarus remained the primary supplier, accounting for 106,400 tons.
- Other contributing countries included Azerbaijan, Uzbekistan, Armenia, and Turkey.
Exports:
- Russian butter exports were modest, with Kazakhstan, Armenia, and Azerbaijan being the main destinations.
- The total export volume and value remained relatively low compared to imports.
Top Importing and Exporting Countries
Top Importing Countries to Russia:
- Belarus: 106,400 tons
- Azerbaijan: Significant contributor
- Uzbekistan, Armenia, Turkey: Emerging suppliers
Top Exporting Countries from Russia:
- Kazakhstan: Primary destination for Russian butter exports
- Armenia and Azerbaijan: Other notable importers
Market Value and Pricing
- The Russian butter market was valued at approximately $1.4 billion in 2024.
- The average import price stood at $5,852 per ton, reflecting a 12% increase from the previous year.
- Export prices averaged $4,917 per ton, indicating a 74% rise year-on-year.
These developments underscore Russia’s efforts to balance domestic production with strategic imports to ensure market stability and meet consumer demand.
