Mauritius: Milk Wanted Everywhere and Not a Single Drop in Price

MAURITIUS - The price hike of imported milk is forcing people to diminish consumption. Multiple actors show the situation will not improve and local production is the only way out.
calendar icon 4 July 2007
clock icon 3 minute read
80% of the milk consumed in Mauritius comes from Australia and New Zealand.

Sukesh Purmanund is worried: cost insurance and freight (CIF) has sky-rocketed for imported milk and, as representative of Greenmeadow, a full-cream make, he feels powerless : "I need a 40 square feet container for 25 tons of powdered milk. Now it costs Rs 4,5 million, against Rs 2 million a few months back."

The price of imported powdered milk is increasing at a regular pace. Fatally, as Dr Saoud Baccus recently noted in an opinion paper published by l'express, the price of milk has increased by at least Rs 5 at consumer level. Yet this is no banal commodity. "With milk, as with gasoline, consumers have a hard time turning away even when prices soar", wrote Regan E. Doherty, a Chicago-based journalist for Reuters.

This is significant: as long as local offer cannot sustain our domestic market, no other stuff than milk is more linked with the drawbacks of globalization. Except oil. "80% of the milk consumed in Mauritius comes from New Zealand and Australia", explains Jean-Cyril Monty, the officer in charge of the diversification desk at the Mauritius Chamber of Agriculture. "Now that the price has risen by 40% since the beginning of the year, people are diminishing their consumption." This rise in price, which he believes will continue with another 30% by the end of the year, is related to multiple factors outside our control.

China's imports from Australia

In some countries, corn prices have been pushed up by demand for ethanol fuel, which uses it as raw material. Corn being needed to feed cattle, milk prices have followed suit. As feed costs rise, dairy farmers pass the costs up the food chain.

But the problem of Mauritius is at another level: Australia has experienced severe drought for three years. This means decreased productivity of 20 to 30% from dairy farms. Meanwhile, China imports more and more from Australia. "We have explored other markets, like Argentina", says Sukesh Purmanund, "but this country is protecting its domestic market with a huge tax of USD 2,000 per ton."

The days when it was current to import from Europe are gone. The subsidies on milk having been suppressed in the EU, the latter encourages production of added value dairy products other than milk. India has stopped exporting to concentrate on its domestic market. And imports from China have been inconclusive: "It smelled like buffalo milk", comments Sukesh Purmanund. "For three months, I did not find any producer. I am finally importing from Europe but it was not easy. The market is sporadic."

Also, as one brand of milk becomes unavailable, another one benefits from the transfer of demand. In principle. Even then, the price is controlled by the authorities. But some importers feel they should be encouraged to import more by liberalising prices, which would mean more expensive milk in exchange of imports that would be carried out on a larger scale than on a one-month basis and with more focus on the type of milk people actually want.

This leads to another concern: quality and choice. According to the Consumer Protection Unit (CPU), there is neither shortage of powdered milk nor significant decrease in choice. "The brands that have disappeared were represented by importers who did not have the resources to go on with the rise in costs. In a few cases, another brand of milk has quickly appeared too", says Jain Seegoolam, acting head of the CPU. "It is false to speak of shortage, falser to speak of hoarding. In some cases, it is true that consumers have to shift to another brand of milk. It depends on how you want to drink your morning tea, with or without milk at all."

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