Nestlé's announcement that it will stop buying C-grade milk from producers from Veraguas reflects the growing loss of market share for local milk to imported products.
Wednesday, May 17, 2017
Growth in imports of milk and its substitutes continues to take away market share from Panamanian milk producers.In the case of Nestlé Panama, the company reported that"imports of milk substitutes by third parties has caused a decrease in the consumption of certain lines of their dairy products."For this reason, the company will stop buying 16 thousand liters of C milk per week from producers from Veraguas.
Regarding the increase of imports of milk, substitutes and other dairy products in the country,"...From May 1, 2016 to March 27, 2017, 897 thousand kilograms of evaporated milk was imported from Peru, Costa Rica and the United States, according to figures from the Customs Authority."
Euclides Diaz, from the National Cattlemen's Association told Prensa.com that "... in the country, imported milk is being marketed as evaporated milk, when in fact it is a flavored and colored drink that simulates milk ...While in Panama evaporated milk is processed using fresh cow's milk, the imported canned ones are made from a combination of several substances, and a minimum portion corresponds to cow's milk. This makes it possible, according to Diaz, to lower production costs and lower consumer prices."
In 2017, trade in milk and dairy products among countries in the region amounted to $306 million, 2% more than what was sold in 2016, and the highest value in the last six years.
Figures from the Information System on the Milk and Milk Products Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]
Honduran farmers are looking for alternatives to commercialize milk in the Salvadoran market, by giving sanitary certification to artisanal dairy plants.
In light of an oversupply of milk that is affecting the Honduran livestock sector, producers are looking for neighboring markets where they can export milk.They report that many of the plants in Honduras are not receiving the surplus product because they do not have the capacity to process it.
Industrial and milk producers have denounced that there is a growing presence in the region of products which are described as dairy but which do not contain milk nor comply with health regulations.
Ranchers, farmers and representatives of industrial companies reported the matter to the Panamanian Food Safety Authority (Aupsa), arguing that "...
With a program of incentives for small producers, Nestlé is trying to stimulate productivity of its 3,500 suppliers, in order to increase milk production.
The company processes the raw material at its site in Nata, Cocle Province with which it then supplies to Central America.
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