DAIRY IMPORTS DOWN 5.4%

MBABANE – A welcome change.

There was a notable drop in dairy imports in the second quarter of this year as compared to the previous one. The fall comes at a time when Eswatini Dairy Board (EDB) is in a drive to drastically cut imports of dairy products which are sufficiently produced locally to protect the blossoming local industry.

Statistics

According to the latest imports statistics from EDB for the first half of 2021, total volumes of imported dairy products between January and March were at about 7.26 million kg/l.  The figures fell to about 6.8 million kg/l in the second quarter (April to June). Calculations by this publication show that this is a fall of 5.4 per cent. Among the contributors to the promising figures were emasi (sour milk), which are also sufficiently produced locally but were still being imported in large quantities over the years.  Sour milk imports in June were recorded at 81 794, which are the lowest figures in a long time. Meanwhile, EDB had proposed that a 40 per cent import levy be charged on all dairy products which are sufficiently produced locally, such as emasi (sour milk), yoghurt, fresh milk and fresh cream.

The levy was supposed to kick in on July 1, 2020 but there were reportedly registered concerns from some of the stakeholders who felt the timing could be bad due to the effects of the coronavirus pandemic. As a result, Dairy Board CEO Dr Tony Dlamini announced the suspension of the levy until further notice. At the time, he said the sector on its own had not been left unscathed by the devastating financial implications of the economic downturn.

Engagements

There are concerns that the 40 per cent is too much, so the consultations have stretched further. But EDB, in a recent interview, has assured that the engagements are at an advanced stage. The Eswatini dairy industry makes a large and growing contribution to the economy in the country.  The local dairy industry is said to be lucrative in nature presenting a number of investment opportunities for both domestic and foreign investment. The country is among the African countries with a high consumption per capita of dairy products (90litres/capita/annum) which present enormous investment opportunities in the locally dairy industry.  This is per an overview of the industry done in the past year. Despite the high consumption per capita, the country remains a net importer of dairy products with approximately over 80 per cent of local consumed dairy products imported mainly from South Africa. The products with a huge local demand are UHT milk, Yoghurt, cheese, emasi (sour milk), fresh milk, dairy juices and baby formula.

Consumption

Consumption of dairy products is currently estimated to be 88.44 million litres as of 2020. About 76.6  per cent of the dairy products consumed in the country come through imports and the remainder is produced locally. Domestic production continues to fall short of the rising demand for dairy products in the country. However, domestic production has increased over the last five years and is currently at 20.68 million litres in 2020, which represents 23.4 per cent  of total consumption. The dairy imports recorded in 2020 stood at 67.76 million litres (liquid milk equivalents) compared to 65.81 million litres in 2019. The local dairy market still has a lot of potential which needs to be exploited.. Emasi arealso imported in high quantity which demonstrates the availability of a market that is yet to be exploited.

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