TALLINN - Several dairy companies in Estonia have said that they may start buying cheaper milk from Latvia and Lithuania after May 1 when the three Baltic countries become members of the European Union.
In the neighboring countries the price of a liter of milk is more than 1 kroon (6.4 euro cents) cheaper than in Estonia, the daily Postimees reported. Most Estonian dairies currently pay farmers 4 kroons per liter of milk, though as recent as three months ago the price used to be as much as 1 kroon.
"It pays to bring milk from Latvia even if there's a price difference of 20 [Estonian] cents, but now milk is cheaper in Latvia by an entire kroon," Aivar Haelm, manager of the southeast Estonia-based Polva Piim (Polva Dairy), said.
In Europe it is not uncommon for dairy companies to bring milk from as far away as 600 - 800 kilometers, industry officials said. In Estonia, milk would be imported from Latvia with trucks taking up to 35 tons at a time, compared with the vehicles with a capacity of 25 tons or less currently used.
The price rally over recent months was sparked by Kalevi Paide Tootmine (Kalev Paide Industry), which outbid Laeva Uhistu, one of the main suppliers of Laeva Meierei, when it offered 4 kroons per liter. Allegedly this was the reason for the resignation earlier this month of Peeter Puskai, manager of Laeva Meierei's owner Valio Eesti, the Postimees reported.
Most industries have in the meantime followed Paide and set the price for unprocessed milk at 4 kroons a liter. Industry insiders agree, however, that such a price is too high, profitable production becomes impossible. According to them, the optimum price at this point would be 2.2 kroons - 2.30 kroons per liter.
