English - SIG Combibloc

Effects on the global dairy market
This means that, as has already been the
case with other agricultural products, Brazil
is now emerging onto the global dairy market
as new competition for established providers
such as the European Union, Oceania, the
USA and others. Market observers see the
timing of this market entry as extremely
favourable – particularly for cheese and
powdered milk, a prolonged period of heightened
global demand is expected. This is driven
among other factors by a booming global
economy, population increase, especially in
Asia, and increasing dairy consumption in
newly industrialised nations. Simultaneously,
Brazil’s entry into the market coincides with
a downturn in production due to recurrent
droughts in Australia, and very low stocks of
powdered milk and butter in European Union
countries as a result of years of EU measures
to limit dairy production.
As Brazil’s entry onto the global market
therefore coincides with a period of low stocks
and high demand, it is unlikely to result in
the price wars between the established providers
and the newcomer that usually arise
in such situations.
Prospects for the future
Market observers see Brazil on a sustained
growth trajectory. The domestic potential –
largely contingent upon an increase in purchasing
power among Brazilian consumers – and
the new overseas markets promise further
growth.
It is likely that growth in raw milk production
will result principally from increasing
the output of Brazil’s more than 20 million
dairy cows, which remains low. Linked to this,
with its potential to boost South America’s
MERCOSUR free trade zone, and in the
expectation that customs barriers affecting
Facts & Trends 22/23
global trading in dairy products will continue
to be dismantled, new chances beckon for
Brazil to develop its growing role in the global
dairy market.
sig.biz/combibloc 01/ 08