Argentina dairy sector hard hit by soft PS consumption

17 August 2016 23:04 Source:ICIS News

HOUSTON (ICIS)--While some petrochemical end-use sectors in Argentina are projecting an uptick in domestic demand, the important polystyrene (PS) dairy sector is still in the shadows, a market processor said on Wednesday.

“The market is still quiet, and sales fell,” the processor said, “and there is not sign of re-activation.”

The sector includes packaging for many dairy products, including yogurt, butter, milk, cottage cheese and sour cream. 

Usually by this time of the year buyers begin to place orders for the summer-like products such as yogurt, the processor said. But that has not happened yet and problems remain with buyers being unable to gain cash or credit to pay for purchases.

“[Usually] there is a change on production by August. [Sales of ] Dulce de leche [containers] (a caramel flavored milk product) softened and we began to produce yogurt containers,” he said.

But that has not happened yet.

“[The dairy sector] is affected the most,” the processor said, because of weather conditions, union-related problems, and softened end-consumption demand. 

“The price cost for a yogurt rose so sharply that now [people] purchase a tetra [plastic liter-bag],” the processor said. It means that the plastic consumption is shifting for those plastic able to process food containers that handles more volume of product instead a plastic cup.

PS resins are widely used as protective packaging for such products as CD and DVD cases, food containers and disposable cutlery.

PS prices have remained mostly unchanged since May.

Demand for other plastics sold in Argentina, such as polypropylene (PP) and polyethylene (PE), has shown some improvement in recent weeks..

Argentina PS producers are Petrobras (now Pampa Energia) and Resigum.

INSET IMAGE: Yogurt in polystyrene packaging. (imageBROKER/REX/Shutterstock)

By Marianela Toledo