Thursday, October 09, 2014

Global milk demand should grow but Brazil lost in competitiveness

With high of 16.5% in milk collection indexes for August, in yearly comparison, prices paid to producers follow in fall. By contrast, analysts estimate increased dairy consumption at global level in the coming years and the Country loses competitiveness, so that is still in the position of importer.
"We bought around one billion litres of milk and sell around 500 million. We have no capacity to export more because countries like United States and the European Union (EU) subsidize the producers for export. So we are less competitive and most of our external sales goes to Latin America, "explains the President of Brazil, Jorge Milk Rubez.
The President of the National Confederation of milk Livestock agriculture and livestock of Brazil (CNA), Rodrigo Alvim, told the DCI that prices on the international market fell substantially, making external sales.
The main product exported by Brazil is the powdered milk, approximately 74% of exports. In the international market is going on devaluations since the beginning of the year, because the European Union and New Zealand also increased production.
"The Russia embargou the import from USA, European Union and Australia of powdered milk, and that milk that would be intended for the production of cheeses, eventually being directed to production of powdered milk. IE is "left over" milk on the world market too. As domestic prices are still at high levels, this is yet another reason that shows the lack of competitiveness of Brazil out there ", completes the team Milk market analyst the Center for advanced studies in applied economics (Cepea), Wagner Yanaguizawa.
In this scenario, in the next decade, the global consumption of dairy products must exceed the supply available for the first time in history. Tetra Pak ' s survey reveals that the expectation is 36% expansion until 2024, mainly due to the increase in population, the higher purchasing power and urbanization in Africa, Asia and Latin America.
Domestic market
"There was a tremendous drought in several regions which rose production costs. The catchment has increased and prices have been falling, so the Bill does not close. We hope that this process will stop and that domestic demand will increase, "said Adebayo, the CNA.
In assessing the Cepea analyst, this scenario should remain mostly because with the arrival of rains the milk supply increases and, consequently, the capture. Soon, prices must go down. Problems with adulteration of milk by the dairy in Rio Grande do Sul, made with the milk from coming to the market of São Paulo arrived with prices below the local market, "the paulistas companies that had to take a drop in prices to sell the production too," says Yanaguizawa.
By the side of the demand, with the end of the year and the start of school holidays the availability of milk on the market should increase, another factor that will help in overthrowing prices, seasonality.
"In addition, some industries are getting a notification about a fee which will be charged starting in October. We don't know for sure what it is, but we know that if that happens it will be even worse for the producer, which will have lower profitability ", says Jorge Rubez.
Valor Economico
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