July 25, 2008


Record-high exports for Brazil's dairy products


Brazil is expected to export a record-high of 1 billion litres of milk products this year, generating revenues of up to US$750 million, according to an analyst from National Food Supply Company (Conab).


In H1, foreign sales stood at US$226.8 million, just US$36.2 million shy of the US$263 million earned from dairy exports for the whole of last year.


Conab analyst Maria Helena Fagundes said milk powder and condensed milk account for 75% of exports. Other products include whole milk powder, dairy cream, butter and cheese.


Imports of dairy products, according to Fagundes, should be about US$200 million this year, resulting in a US$550 million surplus for Brazil.


Although Fagundes said H2 sales are expected to grow even further due to an increasingly lucrative foreign trade market, Brazil's share in the dairy market accounts for less than 2 percent of global trade.


Currently, Brazil produces about 30 billion litres of milk per year, and exports constitute just 3 percent of the total. Brazil exports mainly to Latin America, Africa and the Middle East.


Despite rising animal feed prices, Brazil's dairy industry hold promise for further growth as majority of the herd is raised on pasture and do not depend as heavily on feed as compared to its European counterparts.


Furthermore, leading global suppliers, such as Australia and New Zealand, have little production surplus available for exports, partly due to drought. The EU, on the other hand, is targeting the domestic markets, especially new member countries from Eastern Europe, which are undergoing rapid economic growth.


Brazil is the leading world supplier of beef and chicken, and one of the top three producers of soy. The country's dairy sector has been showing deficits until 2003, and again in 2006, preventing greater expansion in production.

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