Russia Turns to UAE and Turkey To Tackle Butter Price Surge

Facing a 26% price hike, Russia is importing butter from the UAE and Turkey to stabilize its market, though experts doubt it addresses the root issue

Faced with a 26% rise in butter prices since December 2023, Russia has begun importing from the United Arab Emirates and Turkey to stabilize its domestic market. The Federal Service for Veterinary and Phytosanitary Supervision announced that the first shipment of 99 tons arrived from the UAE on October 18, with imports from Turkey starting soon after.

Butter prices have climbed well above Russia’s overall inflation rate of 8.6%, fueling consumer anxiety and even cases of butter theft in supermarkets. To address the shortfall, Russia is diversifying its import sources as Western sanctions have drastically reduced butter imports from Latin America—from 25,000 tons in 2014 to just 2,800 tons in 2024.

Expanding the market—why not? Arab countries aren’t exactly a huge or active market for dairy products.

According to Russian economic commentator Tatiana Rybakova, the UAE’s motives for the butter deal are purely economic. “Expanding the market—why not? Arab countries aren’t exactly a huge or active market for dairy products. So, to effectively enter the European and Asian markets, or Russia, which connects Europe and Asia, is always beneficial,” she said.

She also pointed out that the UAE has recently increased investments across Europe to access new markets. This shift aligns with its broader economic strategy of diversifying trade opportunities.

Explaining Russia’s limited options, Rybakova said the country had to turn to the UAE and Turkey. “Remember, back in 2015, [Russian President Vladimir] Putin introduced anti-sanctions, banning food imports from Western countries, which at that time weren’t even considered unfriendly yet. We used to import butter from New Zealand, Finland, and the Baltics, but now those options are gone,” she explained.

Dr. Nikolai Topornin, an expert in international relations, described the cooperation between Russia, the UAE, and Turkey as driven by economics rather than politics. “I wouldn’t say there’s a significant political interest,” he told The Media Line.

“Butter is a crucial social product, part of the essential basket alongside bread, and its rising cost triggers inflation and impacts the buying power of Russians,” Topornin said.

Butter is a crucial social product, part of the essential basket alongside bread

Earlier this year, the crisis worsened when major Russian dairy producers announced production cutbacks. “In late September and October, about 10 large producers said they would either stop making butter entirely or significantly reduce production,” Topornin said. “This led to reduced supply on the domestic market. Consumption, however, remains high, and when shortages occur, other producers raise prices.”

To address the issue, Russia acted swiftly by securing approximately 20,000 tons of butter from Turkey alongside imports from the UAE. “More negotiations are ongoing,” Topornin said. “Even within the Eurasian Economic Union, it’s challenging to get additional supplies. You’d think neighboring countries could meet the demand, but their production capacities are limited. Even Belarus, a consistent supplier of high-quality butter, cannot fulfill the shortfall.”

Imports from former suppliers like Finland and Estonia have long been banned. “Finnish butter and cheeses were very popular here,” Topornin said. “Given the current situation, Russia has no choice but to turn to nations with favorable relations and reasonable supply costs.”

The UAE has carefully managed its trade with Russia to avoid jeopardizing its position in the West, Rybakova noted. “They don’t engage in sensitive trade sectors or with sensitive products,” she said. “They focus on relatively harmless areas, like food products.”

To explain the UAE’s approach, Rybakova cited a Russian proverb: “A gentle calf sucks from two cows.” She emphasized that the UAE and other nonaligned countries in the BRICS bloc benefit from trading with multiple partners to secure advantages wherever possible.

Clarifying the details of the deal, Topornin said the UAE’s involvement is managed by private companies rather than through government agreements. “The imports are handled by private companies, not government agreements,” he said. “It’s likely Emirati firms are private enterprises offering high-quality products that meet Russian standards. If they have surplus butter, why not sell it to Russia? The arrangement benefits both sides.”

He added that this trade deal progressed faster than most. “There were likely high-level communications between Russian and Emirati officials,” Topornin said. “Russia’s Ministry of Economic Development probably consulted their Emirati counterparts and received guidance on which companies to approach. In the Emirates, such requests are closely monitored and unlikely to be overlooked.”

Stabilization is possible, but prices won’t drop back

Rybakova expressed skepticism that the import deal would return butter prices to previous levels. “Stabilization is possible, but prices won’t drop back,” she said. “It’s typical market behavior: When something becomes scarce or expensive, imports fill the gap, whether from a neighboring region or a distant country. The global market acts like liquid, flowing to cover shortages or price spikes. But artificially replacing established trade connections is far less efficient.”

In his assessment, Topornin described the imports as “a temporary fix” and called for long-term strategies to address the problem. “The current measures may stabilize prices in the short term, but they won’t address the root problems,” he said.