FAO dairy market assessment
Citation
CTA. 2004. FAO dairy market assessment. Agritrade, January 2004. CTA, Wageningen, The Netherlands.
Permanent link to cite or share this item: https://hdl.handle.net/10568/52890
External link to download this item: http://agritrade.cta.int/Back-issues/Agriculture-monthly-news-update/2004/January-2004
Abstract/Description
The FAO review outlines trends and developments in all major areas of the...
Notes
The FAO review outlines trends and developments in all major areas of the world. The November 2003 FAO dairy market assessment showed an increase in international dairy prices between August and October, after a period of stability in the first half of the year. As a result of limited export supplies and sustained import demand, these moderate price rises are expected to continue. The report shows butter and cheese prices increasing more strongly than those of milk powder. As world prices have risen export subsidies paid by high-cost OECD producers have fallen. Nevertheless the levels of subsidy required to bridge the gap between the internal prices of high-cost OECD producers and the world market price remains substantial. The report notes that with WTO limits on subsidies for basic dairy products, recent years have seen an expansion in exports of unsubsidised value-added dairy products from both the EU and the USA . In the case of the USA ‘such exports now account for a greater volume of exports than bulk items requiring subsidy'.
As a result of rising international prices, domestic dairy industries in developing countries which have relatively open markets are facing less competition from low-priced imports. This being said, the report notes that in Senegal in 2003 ‘a large private sector dairy withdrew from processing domestic milk ... to concentrate on producing dairy products based on imported materials'. While the processing capacity was taken over by a government agency, the development of a domestic Senegalese dairy sector in the face of competition from imported products is seen as a major challenge.
Comment:
The trend towards the export of greater volumes of value-added dairy products is likely to take off in the EU under the impetus of the implementation of the agreed reform measures in the dairy sector. This could well intensify the development challenges faced by ACP dairy sectors as European exporters ‘cherry pick' the most profitable segments of the local dairy-product markets in ACP countries in Africa.
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- CTA Agritrade [1156]