In terms of volume traded, dairy sales to Guatemala have gained ground and are currently the second most important market for Nicaraguan companies.
During the first quarter of 2021 Nicaragua exported 17.14 million kilograms of dairy products, of the total volume 12 million kilograms were purchased by Salvadoran companies, 2.61 million kilograms were placed in the Guatemalan market and 2.04 million kilograms were traded in the United States.
Although the economic and political crisis has hit several productive activities in Nicaragua, the dairy sector plans to close 2019 with a 5% increase in sales abroad.
In addition to the crisis that has affected Nicaragua since April 2018, businessmen in the sector identify as obstacles to the growth of their income the commercial obstacles that persist in Honduras and El Salvador, the entry into force of the tax reform and the constant increases in electricity tariffs.
For businessmen in the sector the decline in dairy sales to May this year is mostly because of the rise in tax obligations in the country, directly impacting on export competitiveness.
Data from the Center for Export Procedures (Cetrex), say that between January and May 2018, and the same period in 2019, foreign sales of dairy fell from $53 million to $45 million, equivalent to a fall of 16%.
Between 2017 and 2018, exports of milk and milk products fell 8%, and producers expect the downward trend to continue this year, because of the negative impact of the tax reform.
Figures from the Central Bank of Nicaragua show that between 2017 and 2018 exports of milk and milk products fell from $184 million to $167 million, and the volume traded fell from 85 million kilograms to 63 million kilograms.
The sector is backing new destinations such as the Dominican Republic and Cuba, through a commercial mission that will travel to these countries in search of potential buyers.
According to representatives from the Embassy of the Dominican Republic in Nicaragua, the Caribbean country imports from Europe and the US, milk powder, cheese and other dairy products. They explained that the requirements for the entry of products are "technically possible and in sanitary terms are those that are necessary."
The union estimates it will manage to export $200 million, after closing 2016 with $172 million due to health conflicts that led to the temporary closure of neighboring markets such as Costa Rica.
The difficulties faced by the dairy industry in Nicaragua in mid-2016 with theconflict over trade in dairy products with Costa Rica, and the temporary closure of the market in Honduras affected the overall performance of the sector, whose exports did not exceed the $200 million that had been achieved in previous years.
Oversupply generated by the closure of the borders of Honduras and Costa Rica and the excessive rainfall in the country has brought down the price of industrial milk by up to 37%.
According to the union of dairy farmers up until last week a gallon of milk sold for $1.4, whereas now it barely reaches $0.87.
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.
So far this year 21.8 million kilos of liquid milk have been exported, 9 million more than in the same period of 2014.
Sales of various presentations such as skim milk, low-fat, lactose-free, whole milk reported up to 21 April an increase of about 70% in both value and volume, as reported by the Center for Exports. So far this year about $17.3 million has been generated from sales of fluid milk.
On 12 and 13 February livestock and dairy sector representatives will be meeting to discuss issues such as primary production and processing of raw materials.
The XIII Congress will be run by the Nicaraguan Chamber of Dairy Sector (CANISLAC) and will include the participation of specialists in the area who will give talks and lectures around two main axes, market demand and the transformation of raw materials.
Meat sales abroad in the first half of the year amounted to $207.8 million, 14% more than in the same period in 2013.
Exports of milk in the period in question also showed a better performance despite the drought affecting some of the country's production areas, since they increased by 17% compared to the first half of 2013.
Decline in the supply and the high costs of production are affecting sales revenues locally and abroad.
Data from the Central Bank of Nicaragua (BCN) reveals that prior to September the national collection of milk was 72 million gallons, that is 2.9 million less than reported in the same period in 2012.
The entry into force of an Agreement with the European Union is not an opportunity for Nicaragua's dairy industry, which recognizes that it is not ready for that challenge.
Furthermore, the difficulties in terms of competitiveness extend to other Central American countries, where traceability of livestock products is not implemented, as required by European standards.
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