Accession 'not the reason' for increased Czech dairy exports

Related tags Dairy European union

Revenues from Czech dairy exports might have increased by 30 per
cent in the first six months of the year, but the Czech Dairy
Association says it is increasing dairy prices, not higher volumes
due to accession, that is boosting the value of the market. Indeed,
the Association says it is the domestic market that is currently
driving volume growth.

According to official figures exports for the first six months ending in June rose to CZK 3.73 billion (€118m), whilst imports of dairy products remained steady at CZK 1.89 billion.

It has been reported that this increase was due to the effect a rising level of export volumes, brought about by the Czech Republic's accession to Europe on 1 May. However, Michal Nemec, chairman of the Czech Dairy Association, says that improving prices on the international dairy market is the main reason for the increase.

Nemec's comments come despite the fact that the highest increase in the value of dairy product exports were experienced after accession - in the months of May and June. Nemac qualified his statement by pointing out the fact that export volumes have not increased significantly.

According to the Association the Czech dairy sector currently exports 60,000 tons of dairy product - mainly to EU countries such as Belgium, Germany, Italy and Holland, as well as non-EU countries such as Thailand, Libanon and Algeria. The main exports are butter, which accounts for 23,000 tons and cheese which makes up 18,000 tons.

Rather than focusing on exports, Czech dairy companies say that it is the domestic market that continues to be more interesting in terms of growth potential. Nemec says that consumption of dairy products on the domestic market has continued to rise significantly, despite predictions that they would fall due to increased prices.

This is part of a general increase in domestic dairy consumption that has been going on since 1997. After dairy companies were privatised in the early 90s, rising costs saw the consumption of dairy products fall, until the late 90s when rising income levels meant dairy products were more affordable.

According to the Czech Dairy Association, average consumption per capita in the country reached 260 kgs in 1989. This figure continued to decrease until 1997 when the level of dairy consumption stood at 185 kgs per capita. With the situation still said to be improving, current consumption of dairy products now stand at 223kgs per capita. In terms of specific consumption, yoghurt has led the way, with consumption rising by 5 per cent since Czech's accession to the EU.

In recent years the dairy sector in the Czech Republic has witnessed phenomenal growth. In 2003 the sale of dairy products within the country grew by an estimated 24 per cent to reach a total value of CZK 41.5 billion. After a period of heavy consolidation the industry has emerged as robust and in the light of strong demand from both the domestic and international markets.

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