May 18, 2007

Philippine milk producers seeking ways to cushion high-priced milk imports

Philippine milk producers are seeking options to mitigate the impact of the high prices of imported milk in the international market on their profit margins as milk solids continue to increase US$4,500 to US$5,000 per tonne more than the double the price last year pegged at US$2,100 per tonne.

The Milk and Dairy Institute of the Philippines (MDIP) told the Business Mirror that severe drought in Australia, a major producer of skimmed milk powder, and increased demand in Asia have resulted in very rigid supply of skimmed milk powder worldwide, thus, generating price increases.

MDIP president Mabini L. Antonio said the government and the private sector has been carefully studying alternatives to ease the rising costs of milk production which has been on the alarming rate.

He noted that milk producers have already introduced affordable pack sizes for the masses to encourage buying milk products.

Antonio said other options being considered by milk producers are possible product reformulation, cuts in margins and trade expenses and other cost cutting measures.

The MDIP official noted that the price of milk solids has been going up over the last five years due to the increase of milk intake in China.

The growth of China's economy in recent years has given Chinese consumers more purchasing power.

MDIP counts among its members major milk producers such as Alaska Milk Corporation, New Zealand Dairy, and other companies that manufacture infant milk such as Abbott Philippines and Wyeth Philippines.