Fonterra, which dominates the New Zealand dairy scene, unsurprisingly welcomed Egypt's decision. New Zealand dairy products will now enter the country at a tariff of between 0 and two per cent. The move means more competition for European dairy firms like Arla Foods in the strongly emerging Middle East region. Egypt has already developed into a $140m market for New Zealand dairy, according to John Shaskey, managing director of Fonterra Global Trade. But, he said the European companies still enjoyed preferential market access in Egypt, despite the tariff cuts. He hinted that this situation was hurting consumers, adding the cuts would be "good news for Egyptian consumers who face increasing prices from a tight international supply for dairy products". The tariff cuts will also be good news for New Zealand's dairy sector amid predictions of a tough year ahead on the global market. Soaring costs and higher than average exchange rates are expected to pile pressure on the sector. "The coming year is likely to test the stamina and hardiness of New Zealand farmers and exporters with little respite likely from domestic economic conditions," said Hayley Moynihan, a senior analyst for Rabobank's New Zealand division, in a report last week. But, she said long-term prospects were still good thanks to balanced demand and supply on the market, as well as efficient and quality production in New Zealand itself.