Prices improve for milk ingredients

A better balance between supply and demand over the last year has improved prices, despite the build-up of EU intervention stocks in 2016, says a new report on milk ingredients from 3A Business Consulting, The World Market for Milk Ingredients 2016-2020. The market for milk ingredients will continue its volume growth, and milk supply reductions will help the market and provide the stimuli for future volume and value growth, according to Tage Affertsholt, managing partner of 3A.
The world market for milk ingredients continues to grow by 3% annually in volume terms, whereas the value has changed significantly given the price volatility over the period 2014-2017. However, the prices of the higher added-value milk ingredients, eg, milk protein isolates and milk protein hydrolysates, have not shown the same volatility as the commodities whole milk powder and skim milk powder. Currently, it is estimated that the world market for milk ingredients is worth approx. US$32 billion (€29.4bn) and amounts to more than 10.5 million metric tonnes in 2016. Whole milk powder and skim milk powder obviously make up the bulk with more than 90% of this volume.
“The main drivers for dairy remain intact – the world’s population continues to grow, living standards are improving, dairy consumption is increasing especially in the Asian region, and consumers are increasingly being motivated to buy products from a health and nutrition perspective”, says Affertsholt.
Asia including China is the single major dairy market for whole milk power and skim milk powder in the world. However it is also rapidly catching up with the EU and the US in casein/caseinates and milk protein concentrates. Consumption of real high-end milk proteins is still dominated by the EU and the US.
Production of milk powders is huge in Oceania, EU and US but for whole milk powder Asia, particularly with China and India, is a major producer. Casein/caseinates and milk protein production is primarily the domain of Oceania, the EU and the US.
Oceania, and in particular New Zealand, is playing the leading role in export trade followed by EU and US. For the traditional milk powders, Asia and Middle East/Africa are the leading importing regions.
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