Russian margarine production takes off amid western sanctions

Butter ban, weak economy push output to record 933,000 tonnes

LONDON— One effect of Russia’s runaway inflation and international sanctions: margarine production is expanding faster than anywhere else in the world.

The country is the world’s second-biggest maker of the spread after consumers sought a cheaper alternative to butter and lawmakers banned imports from European dairies, according to a report from Oil World, a Hamburg-based market research firm. Output rose 13 per cent to a record 933,000 tonnes in 2014, while production in most countries was stagnant.

“Given the state of the economy, the use of a vegetable oils would be a lower-cost solution than dairy,” Kevin Bellamy, a senior dairy analyst at Rabobank International, said on Tuesday.

“We’ve seen imports of butter into Rus- sia going down rapidly.”

Russians are swapping butter for vegetable-oil spread as the country’s ban against food from the U.S. and European Union approaches a full year. The expansion in margarine production is part of a push for more locally produced food as President Vladimir Putin promotes independence from foreign agriculture.

The country’s imports of butter and butter oil from all origins dropped 71 per cent in the first four months of 2015, compared with the same period a year ago, data from the European Commission show.

Russia has an advantage in margarine production because it’s already the second-biggest producer of sunflower oil, a key ingredient. The oils are refined into vegetable fats that give the spread a smooth texture similar to butter. The country has increased margarine output for the past three years and became a net exporter for the first time in 2014, according to Oil World.