There are indications that Argentina and Uruguay act as oligopolists and
exercise market power in exports of milk powder to Brazil. These two countries export
almost all of these by-products to Brazil, while there is a regionalization of international
trade in these products, restricting the competition with other countries. The main
objective of this paper is to verify the degree of competition in exports of whole milk powder
and skimmed milk powder to Brazil by the existence of market power practiced by the
exporting countries. For this purpose, the residual demand model was used, estimated by three different methods: two-stage least square, seemingly unrelated regressions and three-stage least squares. The
results indicate that Uruguay acts as oligopolistic and exercises market power in both markets, whereas Argentina
acts only in the case of whole milk powder. This suggests that Brazil should increase the competition in milk powder
imports, since the prices would tend to be smaller and consumers would benefit in this aspect