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Swedes milk profits from China dairy market

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Swedish milk cartons (used here to freeze apple sauce). File: Per Åström/Flickr
17:07 CET+01:00
New figures reveal that the Chinese and Middle Eastern markets have put a swing in the step of Sweden's giant milk cooperative Arla.

Among other growth markets, Oman buys milk powder from Arla, before turning into an array of dairy products that are sold on to the rest of the Middle East. Milk powder does not need to be stored in a cold container, making transport easier in countries with warmer climates. 

"Generally we are positive about the growth markets outside Europe," Arla global sales head for milk powder Thomas Carstensen told the TT news agency this week.

Overall, Swedish agricultural exports rose nine percent last year compared to the year before, statistics from Sweden's Board of Agriculture (Jordbruksverket) showed. Exports to China went up 114 percent, while goods sent to Oman increased by 60 percent.
 
The EU still curtails member states' milk production through quotas, with knock-on effects on export-growth potential, but those quotas are set to be revised in 2015. 

Arla, which has 18,000 employees and is Scandinavia's biggest dairy producer, estimates that one fifth of its annual turn-over will come from sales in growth markets by 2017. The co-operative has also got its sights set on China. 

Arla's long-life milk is already for sale in China, where many consumers are known to pay more for western milk due to fears about potential food contamination of home-made products.

One litre of organic long-life Arla milk costs $4.70 on the Chinese market.

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"We can create a great deal of value for Arla farmers by having a presence in China," Arla spokesman Claes Henriksson told the TT news agency.

Sweden's dairy farmers have been struggling uphill with declining profitability, which however improved somewhat last year, TT reported. 

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