MOSCOW, March 3 (Itar-Tass) - Russian First Deputy Prime Minister Viktor Zubkov ordered the Agriculture Ministry and the Ministry of Economic Development to launch an anti-dumping probe on the market of dairy products.

Many Russian companies buy milk on the foreign market at dumping prices. "The European market has an excessive supply of milk, and they're ready to dump (products) on the market. Our task is to expose these firms and supplies; we'll immediately make very tough decisions at the Commission's meetings," Zubkov said at the first Congress of Russian diary producers on Wednesday.

He reminded that the customs duty may increase up to 50 or even 80 percent, which will effectively become a barrier for this kind of product.

"There’s a large field of activity here for the Agriculture Ministry; I request to handle the issue," the first deputy prime minister said.

Meanwhile, the National Union of Mil Producers (SOYUZMOLOKO) is hoping to come to terms with processing companies regarding the purchase price, chairman of the board Andrei Danilenko told Tass on the sidelines of the Congress.

"We believe we'll be able to clear the pricing situation by the end of March. By that time, we'll be able to sum up the results and see what percentage of the market has supported our initiative," Danilenko said.

"The process of signing the agreement between the producers and processing companies will begin as early as today and will continue for the next few weeks. We believe we'll collect a lion's share of both processing companies and producers on the market. It is important for us to find a compromise, and it's very important that it is a general framework agreement, to be used as groundwork by the regions in making their additional regional contracts.

The National Union of Milk Producers insist on the minimal base price for produces at 11 roubles per liter, in accordance with the agreement on the general principles of cooperation between produces and processing companies.

Danilenko explained that production cost of one liter of milk reaches eight or nine roubles at present.

Therefore, 11 roubles is the minimal price for producers, but in some provinces it may increase to 14 to 18 roubles per liter, he said.

Addressing the participants in the Congress, Zubkov said the average purchase price of milk from dairy farms makes up 12.2. roubles per liter, but he warned last year's scenario may recur, when producers had to sell their product at six roubles per liter.

The Union of Milk Producers told Tass that the price of 11 roubles per liter will not remain at this level during the whole year. However, it will create the necessary conditions for "the softest decrease" of price during seasonal fluctuations. According to experts, even if the scenario of the summer of 2009 recurs, the price should not drop below eight roubles per liter.

Zubkov warned the processing companies that it they did not change their "uncompromising position" with respect to producers, the government would take unprecedented measures to support agribusinesses. He said if the processing companies and the produces do not reach an accord within a month, the first deputy prime minister will order to work out a special program of support small dairy factories. It will create the necessary conditions for selling their products and "deliver a blow " at the monopolies.

03.03.2010, 17.54

Source: www.itar-tass.com