MONTEVIDEO – Uruguay’s dairy industry, battered by a delay in payments from Venezuela and the departure of foreign companies in 2015, is experiencing tough times, Ranching Ministry Undersecretary Enzo Benech said.
“We need to set a course for the future, splitting responsibilities among the government, producers and the industry, because we are currently in a fragile situation as a result of reduced demand and low prices on international markets,” Benech said in a statement released by the Office of the President.
Among the problems affecting the industry is Venezuela’s failure to pay for foods it imported from Uruguay under the bilateral trade agreement, which was signed in September 2015.
The agreement called for Caracas to cancel Uruguay’s debt to Venezuelan state-owned oil giant PDVSA for energy products in exchange for 235,000 tons of food products worth $300 million.
Under the terms of the agreement, the Uruguayan dairy industry was to export 44,000 tons of powdered milk and 12,000 tons of cheese to Venezuela, but targets have not been met because shipments stopped in November due to lack of payment for products already exported.
Uruguay’s dairy industry has been plagued by other problems that pre-date the agreement with Venezuela.
U.S.-based Schreiber Foods and Ecolat, a subsidiary of Peru’s Gloria company, left the South American country last year.
In search of options, Uruguayan dairy producers are eyeing export opportunities in Cuba in the wake of the normalization of relations between Havana and Washington.