Arguing the imposition of non-tariff barriers, Centrolac has filed with the Central American Court of Justice a claim against Honduras because it prevented Nicaraguan milk from entering the country.
Although the Honduran government insists that restricting the entry of milk from Nicaragua is strictly in adherence to sanitary measures, Nicaraguan producers and exporters maintain their position and are demanding that the government take retaliatory measures against Honduras. Therefore, the company Centrolac presented on May 10 a lawsuit with the Central American Court of Justice, denouncing the closure of borders and accusing the country "... of contravening Community law".
The dairy sector in Nicaragua has denounced the imposition of non-tariff barriers by Honduras, whose health authorities have delayed the renewal of certificates for nicaraguan plants.
It has been estimated that 750,000 liters of milk per month have ceased to be exported to Honduras since November 2015, because the National Agricultural Health Service has not renewed certification of dairy plants in Nicaragua. This was stated to Elnuevodiario.com.ni by Alfredo Lacayo, executive director of Centrolac. Lacayo added that this situation is affecting not only the industrial dairy sector but also farmers.
Improved productivity and increased industry inventory due to fears of the drought affecting production have led to an oversupply which processing plants are finding difficult to cope with.
Although the dairy sector had thought the start of operations by the Mexican company Lala would be sufficient to meet the supply milk, increased inventories resulting from an increase of at least ".... a liter of milk per cow day, " have changed the situation. While there are plants that are absorbing part of that glut, they are unable to take it on completely, meaning that there is a surplus that could remove price stability.
Producers are demanding a halt to imports of the product arguing that industrialists are taking advantage of the low prices of milk powder to use them as a substitute for fresh milk.
In January this year, imports of milk powder reported $3.89 million, while in the same month last year $3.41 billion was recorded. The price per ton showed a decrease of $10, since during 2014 it was trading at $820 and went down to $810 this year, according to statistics from the Center for Exports.
In what milk processing companies see as a threat, dairy producers are hailing as an opportunity to grow and to enjoy stable prices.
According to an article in Laprensa.com.ni, "the immediate concern of the companies, Centrolac, Parmalat and Eskimo is a lack of clarity over the benefits being offered by the Government to Grupo Corporativo Lala to encourage them to finally decide to invest in Nicaragua, after years of perseverance."
In Nicaragua, Honduras and El Salvador large scale traders and exporters are leveraging the ability of small farmers assuring them market space.
For example, in Nicaragua, 228 dairy producers who are members of the Cooperative 'Cooperativa de Productores de Leche El Triunfo RL ' (Cooproleche) are no longer exposed to having to sell their product at any price . They belong to the supply chain company Centrolac which guarantees these small and medium dairy farmers to be paid a better price.
Footwear, textiles, dairy and meat are some of the goods that have potential to be exported to the Caribbean island.
According to Alfredo Lacayo CEO of Centrolac and the person who led a trade mission of the Chamber of Industries of Nicaragua (Cadin) which traveled to Cuba on May 13, in the case of the dairy industry, the next step is to apply to the Ministry of Health of Cuba to send staff to inspect the Nicaraguan plants in order to certify them for export to that market.
From 13 to 17 May, a trade mission composed of Nicaraguan businessmen will visit Cuba in search of new business.
According to Alfredo Lacayo, chief executive of the company Centrolac, head of the delegation of the Chamber of Industries of Nicaragua (Cadin), the developed tourism industry in Cuba is attracting the attention of agro products.
Representatives from dairy farmers in Nicaragua and milk processors have agreed to increase collection to keep prices stable.
In order to gain more stability in prices, milk producers and processors have decided to increase the collection of milk from 10% to 20% in light of the crisis caused by low prices paid by informal plants.
In order to optimize the productivity of the dairy sector, the government is looking to attract investment from countries in Latin America.
The Chief Executive Officer from the Official Agency for Investment Promotion (ProNicaragua), Alvaro Baltodano, noted that discussions are ongoing with a delegation of investors from Argentina, without giving further details.
International corporation Parmalat sold 51% of its Nicaraguan subsidiary to Productos Lacteos Centroamericanos S.A.
The disposal took place for a consideration of USD 800,000. Furthermore, Parmalat Centroamerica S.A. signed a "license agreement" which will allow Parmalat Group to cash in a total amount of USD 400,000 in the first five years of contract.
Lacteos Centroamericanos is seeking to expand its operations in the region via Honduras and Costa Rica, both markets which they will enter this year.
Elnuevodiario.com.ni reports: "The announce was made yesterday by the general manager of Centrolac, Alfredo Lacayo, who also said that they will take advantage of the commercial opportunities offered by the Venezuelan market, which is a destination that we "have to guard and develop."
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