One of the main buyers of milk abroad Uruguay, Brazilplans to raise export restrictions on dairy products while trying to push prices down and own production goes upsomething that complicates the national dairy industry.
The commercial manager of Estancias del Lago, Martin Berrutti, In conversation with the radio program, Tiempo de Cambio, he announced that the situation of exports of dairy products with Brazil is beginning to get complicated. “We see next month and the following months a Brazil that is going to have milk and where it begins to react quite aggressively with falling prices. Therefore, I envision a rather complicated, difficult and complex second semester for the coming months for the Uruguayan dairy”, explained the commercial manager.
Brazil is one of the main buyers of Uruguayan dairy products and a great pillar for the advancement of the industry. During the first semester, starting in February, sales to the country began to rise steadily until June, selling 57,036 tons for a value of 225 million dollarsbeing the main product traded whole powdered milk.
In this sense, Berrutti assured that a “grey panorama” is coming for the dairy industry due to the decisions of the Brazilian government that tend to protect the internal economy. “Brazilians are pushing prices down and in parallel production is growingwith which the industrialists are pressing downwards strongly”, he explained and remarked that “certain para-tariff barriers” are being seen.
Uruguay is the ssecond supplier of dairy products to Brazil with 3. 4%Argentina being the first with the 56% During the first months of this year, Brazil imported the equivalent of $350.5 millionreflecting an increase of 292.8% compared to the same period last year.
The industry also falters for China
Berrutti also assured that the industry is also affected by China since the participation of the Asian giant has been decreasing in the purchase of whole powdered milk. He last auction was 15%a phenomenon that did not occur 10 years ago, since it is usually bought between the 37% and 45% of the total, on average.
The director of Conaprole, Daniel Labordewho explained that dairy imports from China they are going backwards. According to Laborde, the volume of dairy imported into China fell 6.5% year-on-year in February and a 43% in the first month of the year.
MIEM to the rescue
In this sense, in the month of June the Undersecretary of the Ministry of Industry, Energy and Mining (MIEM), Walter Verryannounced that the Executive Power opened the call to the Reconversion Fund intended to support businesses dairy industry that have seen a deterioration in their profitability.
Through the Reconversion Fund, MIEM will allocate some 9 million dollars in loans for business transformation projects, with a interest rate of 2% and 36 months of grace. In turn, they will be awarded 3 million dollars more in matters of non-reimbursable grants for the return of indirect taxes, totaling 12 million dollars.
Source: Ambito
