BELARUS NEWS AND ANALYSIS
DATE:
06/01/2010
Future Plans For Exports From Belarus
In Belarus the agriculture and food and drink industries play a big part in the country's economic development, and the government has been working to increase exports from these areas, as reported in the recently published Belarus Food & Drink Report for Q110.
Recognizing that increasing exports, particularly to the competitive and stringent EU market, is a long-term and challenging aim, the government is also looking to attract greater investment in the local food production industry, as can be seen with a number of recent developments.
Being close to the main Russian markets of Moscow and St Petersburg, many Belarusian food and drink companies have in the past targeted Russia for exports, but have now started to look further afield for export opportunities. While Russia is the region's biggest market, it is getting more competitive, with consumers demanding better quality products. Also a major issue is Belarus' relationships with Russia, which has deteriorated by rising tensions in past months. Relations have soured due to a number of political issues and many believe that this is the cause behind the Russian decision to ban a number of Belarusian food products, citing health and safety concerns. The trade ban, which started in June, has had a major negative impact on the country's dairy sector, with more than half of its total dairy production historically going to Russia. Under such circumstances, finding other export markets has become all the more urgent.
In October it was announced that Belarus is planning to increase sugar exports to the EU, mainly those countries that already import its sugar; Lithuania, Latvia and Poland. This was followed by an announcement in November from the Ministry of Agriculture and Food saying that it expects to start supplying meat and dairy products to the EU within the coming six months. The country is currently having talks with the EU regarding food supplies, with some of major producers working on technology upgrades to meet the EU standards.
There are a few major obstacles remainimg in terms of increasing exports. One significant issue is the continued nuclear contamination from the 1986 Chernobyl disaster. In June, Reuters reported that the EU plans to extend the legislation on radioactivity checks by 10 years on foods imports from the affected areas, as the current legislation is due to expire on March 31, 2010. The products affected by the restrictions are from a wide range and include meat, poultry, eggs, dairy products, honey and wild fruits. The government is sensibly not putting all it's energies into the EU market, but is looking at markets further afield. In November it was reported that the governments of Belarus and Kazakhstan are planning to create a joint venture (JV) into the manufacture of dairy products. Belarus benefits from a stronger agricultural sector and can contribute it's know-how to the JV, Kazakhstan can bring its greater financial muscle to the table, an important contribution in this time of global recession.
Source:
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