December 28, 2012

 

 

A report from the USDA said that the Philippine's dairy imports will continue to grow in 2013 as local demand continues to outpace domestic supply.

 

According to the report by the USDA post dated December 14, "dairy products are the country's second largest agricultural import after wheat," adding that total dairy imports were expected to reach two million tonnes in liquid milk equivalent (LME) in 2012, 5.26% higher than 1.90 million tonnes LME imported last year.

 

"Despite the likelihood of higher global prices of dairy products stemming from tighter supplies, post expects Philippine dairy imports will continue to expand in 2013 due to strong demand and growth in food processing," the report read.

 

The report stated that the Philippines was only able to produce 1% of its total annual dairy demand. Based on Food and Agriculture Organisation (FAO) estimates, the annual per person consumption of dairy products in the Philippines is at 22 kilogrammes. Local dairy production is less that 0.2 kilogramme per capita.

 

Bureau of Agricultural Statistics (BAS) data showed that dairy production for the nine months ending September reached 13,750 tonnes in 2012, 12.8% higher than last year's 12,190 tonnes. Total dairy production in 2011 stood at 16,450 tonnes, 3.72% higher than 2010 volume of 15,860 tonnes.

 

The USDA report cited the Philippines as a 'large and rapidly expanding market for milk and milk products' because of 'expanding cold chain capacity, increasing number of supermarkets and a blossoming food processing industry.'

 

The strengthening of the peso against the US dollar also makes the Philippines an attractive market for US dairy exporters, it added. The report noted that the Philippines was the fourth largest market for US dairy products in 2011, with receipts hitting US$280.3 million. The Philippine Department of Agriculture, through the National Dairy Authority (NDA), is implementing programmes aiming to increase dairy production in the Philippines.

 

The Herd-Build-Up Programme, a project of the NDA, aims to augment local dairy production through the upgrade of local animals into dairy breeds through breeding programmes; importation of dairy animals, embryos and equipment; establishment of multiple farms; and the preservation of existing stocks.

 

In 2011, 46% of Philippines dairy imports came from New Zealand. The US accounted for 25% and Australia, 11%. Imported dairy products include milk and cream, butter, butterfat, dairy spreads, cheese, and curd.

 

Under the ASEAN-Australia-New Zealand Free Trade Agreement, milk powder, cheese, whey and buttermilk from Australia and New Zealand are able to enter the Philippines duty-free. US milk powder and whey have to pay a duty of 1%; cheese, 3-7%; and buttermilk, 3%, the report noted.

 

"Some US food and agricultural exports to the Philippines are likely to be at a disadvantage as a result of the agreement," the USDA report said.

 

The Philippines also exports dairy products. Its major markets include Malaysia, Thailand and Indonesia. Total volume of the country's dairy exports reached 295,815 tonnes LME in 2011. It was an increase of 16.01% from the 2010 volume of 254,984 tonnes LME.