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Russian Free Press

Kommersant: Prices for yogurt in Russia will rise due to sanctions

January 17, 2023
in Daily News
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Russians are at risk of shortages or rising prices for yoghurts and dairy desserts that use food-grade starch thickener. The problem is that before the war, about 71,000 tons of starch were imported from Europe, but after the imposition of sanctions, supplies stopped, and there are not enough Russian capacities to replace it. Kommersant writes about problems with the production of yogurts and desserts, citing sources in the market.

The publication claims that starch shortages can lead to a reduction in production and an increase in prices for related products. Another Kommersant source claims that the problem is acute only in specific categories of goods, while in the rest there is an opportunity to find alternatives or switch to domestic raw materials. Powdered milk is called as one of the alternatives, but it is an exchange commodity, a sharp increase in demand for which will instantly affect the prices of products sold.

In 2021, Russia produced only 9 thousand tons of starch thickener, so the shortage of raw materials is quite serious. The President of the Association of Grain Deep Processing Enterprises (Soyuzkrakhmal), Oleg Radin, notes that the maximum production capacity of the thickener in Russia is 50 thousand tons, and only two plants produce such raw materials in the country, however, they will not be able to fulfill such an order, since they are banal not enough raw materials - the necessary varieties of waxy corn.

Major yogurt producers Danone (brands Activia, Danissimo), PepsiCo (Miracle), Ehrmann (Epica, Fruttis) declined to comment. Viola has been looking for alternatives since the spring of 2022: partly raw materials are imported by parallel imports, and partly from Asian suppliers. Efko Group claims that it was able to switch to domestic alternatives. Radin notes that in order to reduce the shortage of raw materials in the future, it is necessary to simplify the issuance of permits for the import of seeds, which will simplify the import and increase the planting of corn of the desired varieties.

According to the National Union of Milk Producers, in the first three quarters of 2022, yogurt production in Russia fell by 16% and amounted to 534,000 tons. In addition to the reduction in production against the backdrop of a decrease in the supply of necessary ingredients, Russians have become less likely to buy yoghurts and desserts due to falling incomes. Streda Consulting CEO Alexei Gruzdev, in a conversation with the publication, emphasizes that yogurt is not an essential product, so reducing supply and spending on it is not such a terrible thing for the entire market, which has adapted to new realities with minimal losses.

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