Middle East targeted after EU milk quotas scrapped

EU businesses able to compete with international suppliers in fast-growing markets in Asia and Africa
Middle East targeted after EU milk quotas scrapped
By Sarah Townsend
Sun 05 Apr 2015 01:30 PM

Dairy exports to the Middle East are expected to increase following the removal of European Union (EU) milk production quotas last week.

The system was set up in 1984 to prevent overproduction – the so-called ‘milk lakes’ and ‘butter mountains’ of the 1970s – but is being scrapped so EU dairy businesses can compete with international suppliers in fast-growing markets in Asia and Africa.

The Irish Republic, Netherlands and Germany are all expected to increase production sharply.

In particular, Irish dairy exports to the Arabian Gulf could jump by 50 percent over the next five years, reported The National. Michael Hussey, Dubai-based regional manager of Irish food board Bord Bia, was quoted as saying: “There will definitely be a big impact here. The Middle East will be the target for much of the increased production.”

Total exports of dairy products from Ireland into GCC countries jumped 28 percent last year to €247 million ($271 million), according to Bord Bia estimates, while Irish dairy products such as Kerrygold butter are increasingly visible on the region’s supermarket shelves, the newspaper said.

Phil Hogan, EU Commissioner for Agriculture and Rural Development, reportedly told BBC News that the ending of quotas was both a challenge and an opportunity for the EU.

“It is a challenge because an entire generation of dairy farmers will have to live under completely new circumstances and volatility will surely accompany them along the road. But it is certainly an opportunity in terms of growth and jobs,” he said.

Growing populations, rising incomes and improved land and sea freight connections have fuelled Middle East demand for food imports. For example, data website Business Monitor International predicted in February that local food consumption in Dubai would exceed AED33 billion in 2015 and reach AED35 billion in 2016.

And Dubai Exports, the export promotion agency of the Department of Economic Development, said the food sector already accounts for 10 percent of the emirate’s industrial production, according to a report on Albawaba.

Food exports throughout 2014 were estimated to reach 10 percent from AED10.6 billion in 2013, the agency said.

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