EU dairy imports to face tougher regulations

Citation

(2010), "EU dairy imports to face tougher regulations", Strategic Direction, Vol. 26 No. 11. https://doi.org/10.1108/sd.2010.05626kab.001

EU dairy imports to face tougher regulations

Article Type: Competitive horizon From: Strategic Direction, Volume 26, Issue 11

A report published by Dairy Reporter (www.dairyreporter.com) details new European Union (EU) regulations for dairy products entering into the region. The new rulings replace current regulations launched in 2004, though the European Commission has established a transition period during which certification issued to comply with the earlier regulation will be accepted. In addition to health certificates, areas such as treatment condition, transit and storage are also covered by the new directive. Regarding heat treatment, nations that are allowed to export dairy products to the EU are placed in one of three categories to determine requirements. One key outcome of this is that products imported from countries prone to foot-and-mouth disease have to comply with more stringent sterilization demands. The report also notes that dairy products passing through the EU en route to other countries are likewise subjected to the new regulations. In particular, these shipments must meet standards relating to how the goods are transported and stored.

Climate change set to transform Russian agriculture

Drought conditions in Russia this year has prompted concerns about a significant impact on agriculture, a report published by Russia Today (www.rt.com) points out. Lack of rain has resulted in destruction of more than 70 percent of grain harvest in central Russia but there are no immediate concerns about a shortage because the country normally produces a surplus. However, climate change scientists are predicting that the warm, dry weather of the last two years could last up to two more decades. They also believe that the next five years will be the hottest in this weather cycle. The report suggests that this shift in climate could transform farmers from grain producers into growers of bean and soy crops. Around 50 percent of land cultivated for grain is presently used but prolonged dry weather is likely to see utilization fall to as low as 20 percent as certain crops become increasingly less viable.

Growth in Indian economy set to accelerate

India’s finance ministry has upwardly revised its growth predictions for the country’s economy during fiscal year 2010-2011. The government had earlier forecast expansion of 8.5 percent but now expects to post stronger performance. This trend will be set in the first quarter, where GDP growth of around 9 percent is now considered likely. Predictions of higher economic growth are further substantiated by International Monetary Fund (IMF) estimates that growth of 9.5 percent in 2010 is possible. This represents an increase on its earlier projection of 8.8 percent growth for the same period. A report published by the Tehran Times (www.tehrantimes.com) reveals that the finance ministry is buoyed by high industrial output and expects this to positively impact on economic performance. Growth in consumer durables and capital goods are considered especially significant in terms of increasing the confidence of consumers and business organizations. The report also posts positive news on food price inflation, which is expected to gradually fall to 5 percent by March 2010. However, the continuing rise in the cost of non-food items poses a dilemma for policy makers aiming to control inflationary pressures without causing higher unemployment and jeopardizing growth as a result.

Overcapacity warning for auto market in China

In spite of the booming demand that has propelled China to become the world’s leading auto market, various analysts in the country fear that an overcapacity problem could materialize in the future. Swift development of an efficient public transportation system is cited as one key factor, while it is also pointed out that automobiles are durable consumer products. Increased market demand is attributed to China’s strong economic growth in recent years and a baby boom in the two decades from 1950. A report published by www.china.org.cn claims that overcapacity will become an issue when initial consumer enthusiasm towards automobiles wanes. Nevertheless, both domestic and foreign-invested automakers continue to press ahead with massive expansion plans and ambitious sales targets for the next few years. Such strategies are fueled by confidence that China’s economy will continue to grow and increase desire for car ownership among consumers. There are indications that production among China’s leading automakers might reach 32.5 million units in 2015, significantly up from earlier estimates of 22 million units. But recent figures suggest that market growth is decelerating, while other data have shown that rising house prices has prompted a fall in consumer intention to purchase an automobile within the next year. The report urges automakers to develop strategies and believes that government intervention can help prevent overcapacity from arising. It warns that an overcapacity problem would be difficult to resolve and that areas heavily dependent on the auto sector would face both industrial and social problems.