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MPO press releases

26 January 2007

PRESS RELEASE ISSUED BY BERTUS DE JONGH, MANAGING DIRECTOR OF THE MILK PRODUCERS’ ORGANISATION

Sharp increase in world dairy prices
In rand terms, South African importers are now paying nearly double as much to import the same dairy products as they did six months ago. According to Dr Koos Coetzee, economist at the Milk Producers’ Organisation (MPO), this is the result of a sudden, sharp increase in world dairy prices since July 2006. The world price for skimmed milk powder increased from $1 900/ton in July 2006, to $3 100/ton in December 2006.

The effect of the sharp increase on South African importers, is aggravated by the weakening of the rand over the same period. Early in 2006 it cost R6,17 for a dollar, compared to the current R7,20. In September of last year the rand even dropped as low as R7,70 against the dollar.

It is becoming increasingly difficult to import and milk producers can expect that milk buyers will have to start paying more for local milk. Parmalat has already announced a price increase of 15c/litre from 1 February 2007 for members of Samilco who supply Parmalat.

“The MPO cautioned milk buyers last year to protect and support local producers and not to import injudiciously,” Dr Coetzee said.

For further information, contact Dr Koos Coetzee at 012 843 5600

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