One would imagine that the slump in world low oil prices in recent months should be warmly welcomed by  farmers.

However, the development is doing nothing to help milk prices for Irish dairy farmers at the moment.

Recent days have seen the price of US crude oil to its lowest level since 2003, after the world’s energy watchdog warned the market could “drown in oversupply”. US futures lost 3.6% to $27.43 while Brent crude fell 3.1% to $27.87 a barrel.

This may play well at the pumps for Irish farmers but low oil prices are hitting Irish exports to countries that rely heavily on oil revenues.

According to Ornua, lower oil prices as well as China’s economic slowdown, the Russian import ban and political unrest in the Middle East are all continuing to impact the global demand for dairy products.

However, it particularly highlights the ongoing weakness in oil. It says the oil slump is impacting negatively on local currencies and the payment and buying power of key dairy importers such as Nigeria and Algeria.

These are among the top 40 global dairy import markets and have seen some of the fastest growth in recent years. Together, Bord Bia says, these markets are as important as China.

However, it does also note that while low oil prices impact negatively on Middle East and North Africa markets, they impact positively in developed markets like the EU and US as consumers have consequently more disposal incomes for retail food expenditure and will travel to eat out more, benefiting the Food Service industry’.

According to Bord Bia the value of exports to International Markets grew by an estimated 9% to reach €1.36 billion, which equates to 42% of total exports. Asia led the way with 13% growth to account for over 18% of total dairy exports. Higher trade was also recorded to the Middle East, Africa and North America.