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Dairy sector seeks suspension of Mercosur imports

Feb, 09, 2021 Posted by Ruth Hollard

Week 202106

On February 5, the Sectorial Chamber of Milk and Derivatives, formed by 35 institutions in the sector, asked the Minister of Agriculture, Tereza Cristina, for the Brazilian government to immediately suspend imports of dairy products from Uruguay and Argentina. In the group’s opinion, Mercosur purchases are “predatory” and should be taxed to ease the “delicate” economic and social moment that the national production chain is experiencing.

“The Chamber understood it is imperative to establish an emergency measure to curb the outbreak of predatory imports of dairy products from Mercosur which have been damaging the production chain since September 2020,” she said in a statement. “We submit to the minister a request for the immediate suspension of dairy imports from Argentina and Uruguay until the productive sectors of Brazil and neighboring countries establish mutual coexistence agreements. As an equitable measure, we suggest taxing imported dairy products in the same manner that Brazilian sugar is taxed to enter Mercosur countries, especially in Argentina “, states the text signed by ABRALEITE (the Brazilian association of milk producers), OCB (the organization of Brazilian cooperatives), ABCZ (the Brazilian association of zebu breeders), and other entities.

Besides import issues, the sector also is against the increase in input prices, such as soybean meal and corn, which raised the cost of production throughout the chain; the drop in the price paid to producers, influenced by imports according to the entities; and the retraction in the market of the main dairy products, such as long-life milk, mozzarella cheese, and powdered milk, due to the mismatch between supply and demand.

“In the case of demand, 2021 begins with lower demand due to the decrease in the purchasing power of consumers, especially after the end of the emergency aid”, states the paper. The Minister of Agriculture said it is still analyzing the proposals.

To get an idea of ​​the volume of milk imported by Brazil from Argentina and Uruguay in the last two years, see the following chart:

Brazilian Dairy Imports (HS 0402) from Argentina and Uruguay | Jan 2019 to Dec 2020 | TEU


Graph source: DataLiner (To request a DataLiner demo click here)

Report source: Valor Econômico

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