UAE, Turkiye step in as Russia faces butter price spike blamed on 'ice cream demand'

Russia is importing butter from the United Arab Emirates (UAE) and Turkiye, in response to soaring butter prices, which have been attributed to rising demand for ice cream and cheese.

The agricultural watchdog Rosselkhoznadzor announced that deliveries from the UAE began on October 18, marking the first shipments of butter from that country to Russia.

Higher production costs, coupled with increased consumer interest in ice cream and cheese, have significantly impacted butter prices, according to dairy producers.

Artyom Belov, chief of the national dairy producer association Soyuzmoloko, told a local news outlet that these product segments are major factors contributing to tensions in the butter and cream market. "Ice cream and cheese are some of the reasons why the butter and cream market is experiencing tensions," he said, emphasising the growing demand.

Butter prices have surged by 25.7% since December, far exceeding the overall inflation rate of 8.6%.

This increase has led to incidents of butter theft in supermarkets, prompting retailers to lock products in plastic containers to prevent shoplifting.

The average cost of a kilogram of butter has reached approximately 1,000 rubles ($10.66), reflecting a 20% rise since January.

To stabilise supplies and prices, Russia has imported 90 metric tons of butter from the UAE and recently brought in 20,000 metric tons from Turkiye.

With around 25% of its butter imported—primarily from Belarus—Russia is seeking to ensure availability for consumers.

The decline in butter imports from Latin America has exacerbated the situation, plummeting from 25,000 tons in 2014 to just 2,800 tons this year, influenced by Western sanctions and logistical challenges.

Belarus remains the largest supplier, with exports increasing by 9% this year to 110,000 tons.

While butter prices are a significant concern, they are not the fastest-rising food item; potato prices have surged by 56.4% since the start of 2024.

Last year, rising egg prices prompted President Vladimir Putin to publicly address consumer concerns.

Deputy Prime Minister Dmitry Patrushev, who oversees agriculture, stated that the government will closely monitor butter prices amid these developments.