The dairy sector, just follow difficult months, starts the year 2009 under bad auspices. The world price of butter and powder, two major productions for the financial balance of many dairy groups, continued their slide to the end of last year. 1.885 Euro in October 2008, the ton of powder fell to EUR 1.731 in December in the European market. The decline, according to industry in France, is expected to continue in the first quarter because of the wait of the market and the weakening demand in Asia. Recent auction held Tuesday by the New Zealand co-operative Fonterra also resulted in a decrease of 9 of the price.
Therefore, in difficult conditions that companies and French producers will have to develop the new index, which should fix the prices of milk from the month of April as the Ministry of Agriculture has requested to avoid the risk of understanding pointed to by the Direction of the beginning of 2008 competition.
The scandal caused in China by the discovery of melamine in milk products has triggered a real crisis of confidence among consumers in this area of the world. The Japanese and Filipinos, large importers of milk, have significantly reduced their purchases. The New Zealand, which exports many in Asia, has made the cost of the new State of mind of these populations, says Gérard Calbrix, Economist of the Association of French dairy processing (Atla). Before the decline in demand, Wellington turned to the traditional markets of the France breaking prices, forcing such French companies to renegotiate the decline of 10 of the delivery contracts with the Algeria for 60,000 tons of powder.
Improvement in the 2nd half
In these conditions, industry see as "a lifesaver" the opening of public procurement by the European Union next March for a period of six months, said Gerard Calbrix. These purchases will focus on a volume of 109.000 tons of milk powder to 1,700 euros guaranteed price per tonne. As soon as the affected quantity, the price guarantee falls. This mechanism will also be open for 30,000 tonnes of butter. Given the current importance of stocks of these two products, "the ceilings will be quickly achieved", and the Community intervention will only be a low oxygen balloon, find the Atla.
The horizon should clarify in the second half for the French dairy groups. New Zealand production, undermined by two years of drought, while started to increase ( 2) in reason including conversions of sheep farmers in the milk. But "The New Zealand cannot meet all the demand", although it accounts for 60 of exports of butter in the world, observed Luc Morelon, spokesman for Lactalis, second world cheese group. In Australia, the production is stable, according to Vincent Chatelier, Economist at the Inra (national Institute of agronomic research). French production began a recession. In the United Kingdom collection has fallen by 3 in 2008, confirming the chronic under-usage of quotas reflects.
On their side, clients such as Southeast Asia, the Middle East, the Maghreb and South America should resume their shopping this summer. But French companies will have to count with growing competition from the United States, which increase their production of 1 billion litres of milk annually for several years, while the EU has forced its own by the quota system.
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