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Russia’s Butter Industry Booming

A result of Russia’s high inflation and low currency value has been a boom in the country’s butter industry. 

Russia currently claims the world’s most expanding butter industry. It is facilitated by its own imposed import sanctions on western agricultural products combined with higher importation costs as a result of the low value of the ruble.

The price of butter rose 15% in May compared to the same period last year, generally matching the current inflation rate in the country which is less than one percent higher. However, food inflation in Russia is still extremely high at 20%.

Butter output in the country in 2014 was 933,000 tons, representing growth of 14% compared to the previous year.

Imports of butter and butter oil dropped a staggering 71% in the first four months of this year indicating a huge increase again in 2015 butter production.

Whilst many Russians are opting for oil based spreads as an alternative to butter, there is still great demand in the country with relatively low supply.


Despite the news of growing indigenous industries in Russia, the country is still expected to contract anywhere between 3 and 5% this year.

Additionally, high inflation is denting real wages, which fell 8.3% in the first quarter of 2015 compared to the same period last year.

This is having an impact on poverty levels which are the highest in Russia for 10 years.

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