Dairy imports major impact on local producer prices

The Namibian dairy industry is under pressure from the importation of dairy products, resulting in  a lack of competitiveness of the local commodity. This was revealed in a recent question and answer session with Namibia Dairies’ acting CEO Peter Grüttemeyer.
Grüttemeyer stated “the most important issue affecting the pricing of Namibian dairy products is the fact that imported dairy products, especially those from South Africa are often produced with the use of hormones and Genetically Modified Organisms (GMOs). Hormones stimulate dairy production, resulting in higher yields.”
“This means that producers in markets such as South Africa where GMOs are not banned are able to produce larger quantities of milk, at lower prices.

The South African dairy industry produces so much that it experiences a surplus. To ‘get rid’ of this surplus, the excess products are pushed into other markets, such as Namibia, at prices that are so low that local dairy producers cannot compete” he explained.
Currently the Namibia’s imports of milk are limited to 500,000 litres per month, and imports of yoghurt are limited to 200,000 litres per month while the commercial dairy output is in the region of 2 million litres per month.
Grüttemeyer stressed that the importation is unfair to Namibian dairy producers as it makes it difficult to develop a strong local dairy industry.
He also cited reasons of production factors that contribute to higher prices for locally produced dairy. “Namibian dairy producers are faced with high input costs, such as water, electricity and fuel that are beyond their control. Increases in these prices are passed on to the shops, which include their profit and ultimately pass these prices on to you, the consumer. This is done with all products, not just dairy,” he stated.
He highlighted the reason why the country can not use GMOs to get better yields stating that “The use of GMOs is forbidden in Namibia. This is mainly because we export our beef products to the European Union (EU) where the use is also banned. The EU forms our largest beef export market and if we were to allow the use of GMOs, it would put the beef industry under tremendous strain and the effects on our local economy would be grave.”
“The country’s dairy products, on the other hand, are natural meaning that they are all natural and are made without the use of any growth hormones,” he added.
On the importance of building a strong local dairy industry, Grüttemeyer said “As with all areas of the manufacturing industry, producing (and buying) local products lead to economic independence.
What we need to remember is that the industrialised nations, and those we import from, perfected their formula by supporting the growth of their local industries.”
“Besides losing out on job creation, if we do not support local industries, then we will lose control of product pricing. If, for instance, our dairy industry did not exist, then our market would be flooded with imports and we would not be able to determine the pricing,” he said.