FAO presents new Dairy Market Review
Image: UN FAO
International dairy prices weakened significantly in 2023, while global milk production expanded at a slightly higher pace and international trade contracted for the second consecutive year, although more slowly than in 2022, according to the Dairy Market Review, an overview of global market developments in 2023, released by the UN Food and Agriculture Organisation (FAO).
A slower pace of imports by leading dairy importers, especially China for whole milk powder (WMP), due to high stocks and less than anticipated demand from the foodservice sector despite the lifting of Covid market restrictions, was responsible for a lot of the decline in the first nine months of the year. Milk powders were also more available in the country domestically than in previous years. Other importers such as the Middle East, saw lesser demand due to lower purchasing power, while milk deliveries in the EU went up, adding more downward pressure, the FAO reports.
That being said, prices have increased since October due to tight export availabilities from exporting countries in North America, Western Europe and Oceania. There has also been strong internal demand for milk products in some western European countries.
Meanwhile, global milk production hit 965.7 tonnes, up 1.5% from 2022, mainly driven by volume growth in Asia. Asia now amounts to 46% of total global mil output, including India and China, both of which are leading the expansion. India itself saw a 2.5% increase by volume, to 236 million tonnes , due to an increased herd. China’s milk production saw a 6.6% rise, with higher prices to farmers and supportive government policies that have fuelled expansion in dairy herds and raw milk production. Pakistan also saw an uptick of 2.8% YOY to 64.3 million tonnes, due to more cows.
It wasn’t all plain sailing – Japan, South Korea, Syrian Arab Republic, Iraq and Thailand saws notable milk production declines, the FAO notes. In Europe, milk output increased by 0.3% to 233.6 million tonnes, with increases from Russia, the EU and Belarus, while Ukraine and Norway saw drops.