October 8, 2004

 

 

European Milk Imports Threat To African Dairy Industry

 

The dairy sector in the Common Market for Eastern and Southern Africa (Comesa), is facing an impending threat from subsidised European imports, a trade expert warned yesterday.

 

Mr James Musonda, a senior Comesa trade advisor said the entry of subsidised dairy products into the regional market could soon render locally processed milk and milk products uncompetitive.

 

"We are worried because milk imports from Europe are heavily subsidised and could completely lock out local products from the market," Musonda added.

 

According to Musonda, most Comesa members have yet to develop competitive domestic dairy industries, and are entirely dependent on imports from the European Union and the South African Development Cooperation (SADC).

 

Musonda said Comesa secretariat has opened negotiations with the EU under the World Trade Organisation (WTO) and the Economic Partnerships Agreement terms.

 

Mr Muhoho Kenyatta, the chairman of Brookside Dairies noted that some of the problems affecting the Comesa trading block are being replicated in Kenya.

 

He pointed out that despite having an installed capacity of approximately 2.2 million litres of milk per day, less than one million litres of milk is currently being processed daily. "This is due to a combination of reasons including inadequate infrastructure that limit procurement by processors," Muhoho said.

 

The sector is also faced with low consumer purchasing power as well as the lack of tariff and standards harmonization within the Comesa region.

 

Brookside Dairy is currently involved in an aggressive marketing campaign in the East Africa and Comesa "where we are convinced that there exists a large untapped market."

 

Muhoho said the company has embarked on an expansion programme, which is aimed at expanding its production capacity to around 700,000 litres of milk daily.

 

He warned that the regional dairy industry would continue to lag behind international standards unless member countries move to eliminate bureaucratic obstacles.

 

"There is a need to reduce the number and volume of documentation required for trading among the partner states," he said.