March 29, 2018

Chile probes dairy imports' threat to domestic industry

Chile has begun an investigation to determine whether increased imports of whole dry milk, non-fat dry milk and Gouda cheese is posing a grave threat to the domestic dairy industry.

Last November the Chilean Dairy Farmers Federation (Fedeleche) was reported to have petitioned the government to impose provisional and permanent safeguards of at least 30% for whole dry milk and non-fat dry milk imports, and 27% for Gouda cheese imports. The petition was made after Fedeleche noted a significant increase in imports of whole dry milk, non-fat dry milk and Gouda cheese.

Chilean imports of whole dry milk increased by 55.8% between September 2016 and August 2017, and of non-fat dry milk by 14.4% between July 2016 and June 2017, according to a report by the US Department of Agriculture.

In the case of Gouda cheese, Fedeleche noted that there was a "dramatic increase in imports, reaching a 122.9 percent increase in 2017 compared to the previous year", the USDA report added.

The USDA reported that the investigation will apparently determine the length and percentage of the safeguards that will be imposed.

The US would be greatly affected should safeguards be imposed as it is the largest exporter of non-fat dry milk to the country, representing 76% of Chile's market share for the dairy ingredient. US dairy companies exported $25.6 million worth of non-fat dry milk last year to Chile.

For whole dry milk, New Zealand is the top supplier. Its exports to Chile in 2017 reached $18 million.

In the case of Gouda cheese, the Netherlands is the main exporter to Chile. Exports increased by 900% in 2017 over the previous year, reaching $31.6 million.

The International Dairy Foods Association (IDFA) expects investigators to release recommended provisional measures to the president of Chile this week, it said on Thursday.