Argentina restricts dairy exports

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The government will apply on the dairy sector the same method announced for the meat: exports of milk will be drastically limited to cause an oversupply in the local market that will help slow down the continuing rise in the domestic basket prices. The announcement was made last week by officials of the Ministry of Domestic Trade and it was aimed at the dairy industrial sector.
“There is a virtual closure of dairy exports. Agusto Costa (Secretary of Commerce) met with the major export industries and told them that export permissions (ROE) will not be enabled for less than US$4000 per tonne” of powdered milk, according to a source. The man appointed by the minister Axel Kicillof to watch over the prices would have been conclusive. He told the employers that “if they cannot export for above that price, then sell in the domestic market”.
This amounts to an almost complete shutdown of powdered milk exports, which represent more than half of dairy shipments. Except some particular and exceptional business (like some with Venezuela), no shipment exceeds today US$4000 per tonne. The international market is in the doldrums and now offers the lowest prices since 2012. In the recent auctions of Fonterra, which acts as the global benchmark, the whole milk stood at US$2.750, 40% less than in August 2013. Here, the latest business were materialized for about US$3.300/3.400.
Last week, Domestic Trade announced the cold-storage plants the closure for 15 days of meat exports as a way to force prices to decrease. In the Mercado de Liniers the young bull had overcame the barrier of 17 pesos per kilo and at the butcher’s the half-carcass came with at least 10% increase. The same thing happens to the milk. According to the Cámara de Productores de la Cuenca Oeste (Caprolecoba), the milk to dairy farmers increased in July “between 4.7 to 5%”, and it is already above 3.10 pesos per liter. Compared to the same month last year, at producer level the price rose 51%. At consumer level, nothing seems to have cushioned this rise. According to a gathering of information carried out by Clarin, the dairy products prices in the supermarkets also increased an 50% average last year.
The exports of dairy products had already been restricted by Costa, who handles the export permissions in the very same discreet way Guillermo Moreno used to do.
In March, he announced that industries which paid more than 3 pesos would not receive export permissions (ROE). But, in fact, this was not taken into account and deliveries were made anyway. Until June, 174 thousand tons were sold for 800 millions of dollars. Hence, this new ban.
The decision could not have been made in a worse moment. Apart from the great fall in the international price, a decline in the domestic consumption can be seen.
Besides, the hard dairy guild has not closed joints yet and claims 40%. And all this happens while spring approaches, which improves cow productivity and makes milk supply stronger.
The ghost of a continuing decrement in prices is haunting the producers more than ever.
 
Source: Lechería Latina

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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