March 16, 2012

Asia sees higher dependence on dairy imports

Rising incomes and growing demand for animal protein in Asia are set to propel the region's appetite for dairy products in the world market.

Vietnam and Korea are especially attractive markets for dairy products because both countries are expected to experience significant growth in dairy consumption over the next decade.

Per capita dairy consumption is currently much lower in Asia than the US and other Western countries, but it is expected to grow drastically as the region's large population base begins to gain acceptance for foods like pizza.

Throughout Asia, the new and growing demand for milk and milk products will need to be fulfilled by imported products because many countries are not able to meet domestic production needs. The Hoogwegt Horizons newsletter notes that 78% of Vietnam's milk needs are met by imports, while the figure stands at 37% for Korea and 75% for Indonesia.

It warns, however, that the expected large increase in demand is unlikely to be sustained without significant increase in imports from the US and other dairy producers.

"The US is uniquely positioned to supply to this growing demand. We have the infrastructure to efficiently produce and process dairy products, and we have the ability to grow significantly to meet increasing global demand," said Jerry Slominski, International Dairy Foods Association's (IDFA) senior vice president of legislative affairs and economic policy.

"But Republican Collin Peterson's milk supply management proposal would limit our industry's growth, curtail exports and hinder job creation. IDFA opposes any form of supply management, especially at a time of great market opportunity for our members and the entire US dairy industry," he added.