February 21, 2012

 

 

The split between South American exporting and importing nations becomes increasingly obvious as Argentina's dairy exports soared by nearly one-half last year, lifting the country to third place among shippers of whole milk powder.

 

Argentine dairy shipments rose 49% to 384,000 tonnes in 2011, beating by some 40,000 tonnes, a previous high set five years before, according to Global Trade Atlas.

 

Whole milk powder shipments hit 200,000 tonnes a rise of more than one-half year on year, and taking the country above Australia as an exporter of the product, of which Algeria and China are the top buyers.

 

However, while Argentina increased its trade with both importers, it was also dependant on Brazil and Venezuela for export shipments.

 

Venezuela has seen its industry wither as food price caps imposed by President Hugo Chavez discourage producers which included Italy-based Parmalat.

 

Parmalat issued a public apology to President Chavez in November after criticising the confiscation by authorities of some milk products.

 

"Rest assured we will keep working positively... (and) collaborating with all the important initiatives suggested by your government," Parmalat said in an open letter to the President, who had accused the dairy group of hoarding milk.

 

Brazil's dairy industry has also suffered near-term setbacks, as its producers struggle to compete with imported supplies, both from Argentina and Uruguay, prompting the government to impose import restrictions.

 

Brazil's own milk production fell by 3% in the first 10 months of 2011.

 

Nonetheless, the strong demand for dairy products from a growing and increasingly rich Brazilian population, which has attracted domestic agribusiness giants such as JBS, supported orders from Argentina, whose own dairy industry has enjoyed bumper output.

The 11.2% growth in Argentine milk production recorded in the last three months of last year represented a slowdown from the pace of increase earlier on.

 

This strong pace of growth was attributed to benign weather conditions, and it is unclear whether a drought, which has set back corn and soy crops since last year, has dented milk production too.

 

Uruguay has also expanded as an exporter, raising its shipments by 11% in the first nine months of last year, led by an 81% spurt in sales to Brazil, and again with Venzuela ranking as the second-biggest customer.

 

Uruguay provides Brazil with more than half imports of skim milk powder, a market which grew by 120% in 2011.