Original publication: September 2014
Author: Guillaume Ragonnaud, Research Administrator
Short link to this post: http://bit.ly/2IKGmST
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INTRODUCTION: INCREASING DEMAND IN EMERGING COUNTRIES HAS DRIVEN DAIRY TRADE

Over the past decades, consumption of milk products in the world has been rising, which means more potential market opportunities for EU dairy producers. This growth has been due to the increasing demand in emerging countries, supported by rising incomes (considered as the strongest driver of increased demand for dairy products), changing diets (increasing food intake and changing composition of food consumption), population growth and urbanisation.

 

The EU is among the main players on the global dairy market. Next year, the EU system of dairy quotas, which has been in place for thirty years to control the level of milk production, is coming to an end. As EU markets for milk and dairy products are relatively mature, the supplementary volumes of milk that will be produced after the end of quotas will probably have to be exported.

Due to the perishability of dairy products the bulk of dairy production is consumed domestically without entering international trade. The main dairy commodities that are traded on global markets are Whole Milk Powder (WMP), Skimmed Milk Powder (SMP), butter, cheese and wheypowder.

In recent years, considerable growth has occurred in fresh dairy trade (not only products like yogurts and cream but also liquid milk). One important trade flow is liquid milk exported from the EU to China (100 000 tonnes in 2013 from 56 000 in 2012). Nevertheless, this remains small in relation to the trade in the other dairy products covered and may only be a temporary phenomenon.

Link to the full study: http://bit.ly/529-076

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