Southern Africa is in the midst of a serious milk supply shortfall. The drought of the past few years has caused production problems, which are mainly to blame for the shortages.
According to the Oxford Business Group's economic briefing South Africa (July 26, 2007, Vol. 76), "The long-running drought has pushed up prices of maize and wheat by 50 percent and 43 percent respectively so far this year, a cost that has been passed on to dairy producers who grain feed their stock. This in turn has forced some farmers to move out of the uncompetitive [sic] dairy products market in search of more lucrative returns."
South Africa, however, is not the only market in the region to be affected. Market: Africa Mid-East has reviewed reports of milk problems from Botswana, Namibia, and Zimbabwe as well. Even countries outside the region are reporting problems--for example, Rwanda.
In Southern Africa, the supply shortages and the escalating price of milk has affected the entire dairy industry because of the importance of milk in the production of other dairy products. The Oxford Business Group commented that the global shortage of dairy products has also made the price of imported milk and other dairy products expensive.
Citing an official of the South Africa Milk Producers Organization, Oxford said that price increases were likely to persist until the end of 2007. And while...