Where are you going?
你要去哪里？
The external demand, fuelled in recent years, mostly by chinese purchases, traccionó on the prices of milk and they promoted the production of milk in the main exporters in the world. Everything went book until 2014, but the abrupt and unexpected China reduced its imports of milk powder (three quarters of the imports are milk powder, our main dairy exported), creating a chaos in the dairy planetary.
This is displayed well in the chart Evolution of the production of the major exporters and the Index Dairy developed by FAO (the list of exporting countries include New Zealand, European Union, united States, Australia, and Argentina). The index FAO takes the average of the quantities and prices are exported to the global market, taking the period 2002-2004 value= 100. There we observed the marked fall in the prices of dairy products in the year 2015 and 2016, as well as the volume of milk does not yield, in spite of the low prices. The countries that are still growing in their production are the united States (supported by an internal market plaintiff) and the European Union (without quotas and the growing offerings of butter and skim milk powder for stocks of intervention).
The great unknown, which is a source of countless projections of economists around the world, is to know how will the chinese economy in the coming years. The heady double-digit growth in the last few decades, it had dropped to 7% in 2015 and the chinese authorities budgeted 6% for 2016. This is the product of a major restructuring of the chinese economy where the growth model based until now on the export, industry and investment, gives way to another one where they will have a role more critical services and domestic consumption, within a constant increase in the standard of living of the population. The effects on world trade are to the eye, what is ignored is the time it will take or future effects. As we see in the graph Evolution of chinese importswe notice that beyond the milk powder, all imports of asian countries has been affected. A country that in the decade of the eighties, it didn't matter nothing, he was opening up to the world, becoming the 2nd importer in the world, a place that will remain even when the value of these imports fell 18% during 2015 (the volume of milk powder imported fell 50% in the same period).
This situation is compounded by the continuation of the blockade Russian food imports from the united States and the European Union, and of course to the low contribution of a barrel of oil will stay below $ 50 for a time. Remember that half of the imports of dairy products in the world to make oil-rich countries.
The low expectations that this situation creates, tap on the operations in the future postponing the long-awaited recovery in the price of milk for advanced 2017.
See full article written on march 13, and published in the journal Chakra April 2016