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SanCor's Fall Puts Paraguayan Dairy Sector's Challenges in Focus
🇵🇾 Paraguay /Economy & Trade

SanCor's Fall Puts Paraguayan Dairy Sector's Challenges in Focus

From ABC Color · (16m ago) Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

TLDR

  • The bankruptcy of Argentina's SanCor Cooperativas Unidas Limitada has highlighted sustainability challenges in the dairy industry.
  • Orie Toews of Paraguay's Cooperativa Chortitzer noted that Paraguay's dairy sector faces challenges in finding better markets for surplus production and maintaining profitability.
  • Despite Argentina's dairy industry crisis, Paraguay's sector saw a 10% production increase last year, leading to lower prices but increased exports of powdered milk.

The recent bankruptcy of the iconic Argentine dairy cooperative SanCor Cooperativas Unidas Limitada has sent ripples through the regional dairy industry, prompting a closer look at the sustainability of Paraguay's own sector. Orie Toews, manager of the Eastern Region for Cooperativa Chortitzer, shared insights with ABC Color, emphasizing that while SanCor's troubles are significant, Paraguay's dairy industry operates under different conditions.

the main challenge for the sector in Paraguay is to find markets that pay better for the surplus and sustain the profitability of the chain.

— Orie ToewsOrie Toews, from Cooperativa Chortitzer, discusses the challenges facing Paraguay's dairy sector in light of SanCor's bankruptcy.

Toews explained that international market prices, driven by supply and demand, play a crucial role. He noted that Paraguay's dairy sector experienced a roughly 10% increase in milk production last year. While this led to a surplus and a subsequent drop in product prices, the industry has found a way to manage this by converting excess milk into powdered milk for export. This export capability, even at lower international prices, is seen as a significant achievement for the Paraguayan industry.

Crucially, Toews highlighted that Paraguay does not face production limitations in the field. The challenge, therefore, lies with the industries to efficiently and profitably dispose of the surplus milk. The cooperative's strategy of transforming this surplus into powdered milk demonstrates a proactive approach to market dynamics. This contrasts with the situation in Argentina, where SanCor's collapse underscores the difficulties faced by large, established players in a competitive global market.

Each country has its own reality.

— Orie ToewsOrie Toews explains that international prices and market dynamics differ between countries.

From Paraguay's perspective, as reported by ABC Color, the focus remains on leveraging domestic production capacity and adapting to international market fluctuations. The ability to export surplus milk, even in powdered form, is a testament to the resilience and adaptability of the local industry. This situation is viewed not as a direct threat from SanCor's failure, but as a reminder of the constant need for efficiency and market strategy in the dairy sector.

In Paraguay, we do not have production limitations in the field. Industries have to figure out how to get rid of that surplus milk in the most efficient and profitable way possible.

— Orie ToewsOrie Toews highlights Paraguay's production capacity and the industry's challenge to manage surplus milk.
DistantNews Editorial

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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