FAO Dairy Market Review shows high demand for dairy

Global milk production is likely to be recorded as 950 million tonnes in 2023, an increase of 1.3% year-on-year, the report from the UN FAO Dairy Market Review says. It is being driven by volume growth in Asia, specifically India and China, with moderate growth in the rest of the world and potentially lower production in Africa. Asia is top of the percentage change from 2022 to 2023, growing by 2.3%, and expected to reach 431 million tonnes. leading producers include India, China, Pakistan, Türkiye, Uzbekistan and Kazakhstan. India alone will see 232 million tonnes. 

Europe’s growth is set for 0.5%, or 234 million tonnes. Russia is working to improve yields and has added governmental support policies for cattle herd numbers so should see a three per cent increase in production, the FAO reports.  

The FAO Dairy Price Index trended downward until September 2023, driven by a pace of subdued demand for dairy products, especially for whole milk powder from importers such as China, the world’s largest dairy importer. These lower than expected imports were caused by slower growth in food service sales and increased supplies from domestic sources. Economic downturns elsewhere in Asia, along with rising inflation and currency depreciations reduced consumer purchasing power and demand for imports. 

However, international prices have increased since October, except for cheese, with a surge in demand from Northeast Asian buyers, limited inventories in exporting contries and increased internal demand ahead of winter holidays. There were tight milk supplies in Western Europe and in November, the depreciation of the US dollar against the euro, which also supported higher dairy prices.  

For more information, visit: https://www.fao.org/3/cc9105en/cc9105en.pdf 

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