CAIRO: The past four months have seen an ongoing battle in Egypt’s dairy sector as a decline in global demand for dairy products pushed prices down and increased the volume of powder milk imports.
The trend led to a decline in the price of dairy products in Egypt – good news for consumers, but worrisome for farmers who are urging the government to impose anti-dumping tariffs on imports.
Dairy producers, however, are opposed to this step, warning that it could send local prices skyrocketing.
In recent months, because of increasing imports, the price of milk and dairy products declined by 10 to 15 percent. While farmers are calling for anti-dumping tariffs on powder milk imports to protect domestic production, dairy producers are saying this could mean a 100 percent increase in the price of dairy products.
Producers say the move will only hurt Egyptian consumer who are already suffering the effects of the global financial crises.
In an effort to reach a compromise, the food industries chamber “urged the authorities to take a step to support the farmers through subsidies. At the same time, it warned that protectionism will harm not only the consumers – as the prices will soar immediately – but will also have consequences on trade agreements with other international parties, Yousry Al-Tinawy, general manager of the Chamber of Food Industries, told Daily News Egypt in a phone interview.
According the US’ National Agricultural Statistics Service, the largest milk producers in the world are the EU, the US, New Zealand, India and Australia.
Egypt mainly imports powder milk from the EU, the USA, New Zealand and India, according to the milk and dairy products division of the Chamber of Food Industries.
Last year, local farmers sold milk to producers at LE 3 per kilo. When the global price of corn – used in dairy production – decreased by around 50 percent in the wake of the global financial crises, local farmers refused to reduce prices, Hatem Saleh, head of the milk and dairy products sector at the Chamber of Food Industries, told Daily News Egypt.
“This led milk and dairy factories, as well as pastries factories, to turn to cheaper imported [products], adds Saleh.
On his part, Abdel Qader Al-Heraky, head of the board of the Egyptian Society for Milk Farms, told Al-Ahram, “If the government doesn’t take serious steps to protect domestic milk producers, 15 percent of these farms will shut down.
According to Saleh, “If the Ministry of Trade responds to farmers’ demands to place an anti-dumping tariff on powder milk imports, this will lead to 50 percent increase in tens of dairy products’ prices, which will consequently reduce demand by 12.5 percent.
In the meantime, milk and dairy factories are getting ready to launch in May a three-year campaign to convince Egyptian consumers to use packaged milk as opposed to milk distributed in metal containers.
Naglaa Mohamed, a 37-year-old mother of three, said, “This is all about maximizing profits. Each party is taking advantage of the global crisis instead of giving the Egyptian consumer a break, or [allowing consumers] to finally enjoy the decrease in international food prices.