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.
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.
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.
In addition export earnings of the liquid decreased by 5.4% in the January-November period of 2012 to 2013, according to the Center for Export Procedures (CETREX). Up until November I milk sales totaled $64.01 million, compared to the $67.5 million reported in 2012.