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Asia vital to global milk ingredient stabilisation

By Neil Merrett , 19-Mar-2009
Last updated on 19-Mar-2009 at 12:56 GMT

A supply and demand imbalance within the global milk ingredient market is expected to stabilise in the next few years on the back of strengthening demand in Asia, suggests a new report.

In looking at the market’s prospects from 2008 up until 2011, analyst group 3A says that milk ingredient prices are proving to be volatile on the back of concerns regarding milk commodities.

However, the group said that it expected stability to be driven for growing global demand for dairy products, particularly in the fields of nutrition and wellbeing.

While sales volumes for products like skimmed milk powder and casein are expected to maintain annual growth of about three per cent, market value was found to have fallen significantly in recent years, stated the analyst as part of a new report.

The group conceded that products such as protein isolates and hydrolysates had not proven as volatile compared to products like whole and skimmed milk powders, casein and caseinates.

According to 3A, the global value of the milk ingredient market, currently estimated at $19bn (€14bn), has fallen alongside dairy commodity prices that have almost halved since mid-2007.

Opportunities

Despite declines on the commodity market, the analyst suggested opportunities remained long-term in the market.

“The world’s population continues to grow, living standards in the long-term are improving [and] dairy consumption is increasing especially in the Asian-Pacific nations,” stated the report. “Consumers are increasingly being motivated to buy products from a health and wellness perspective. “

Asia was highlighted by the report to be the single most dairy market in the world currently, with market value in the region estimated at $7bn (€5.1bn) in 2008.

The potential of dairy demand in the region has also created huge opportunities as an import market, with 30 per cent, or 1.1 million metric tonnes, of all milk ingredients traded worldwide found their way onto Asian markets, said 3A

By comparison, the markets of Oceania – New Zealand and Australia – the EU and the US remain the largest suppliers of milk ingredients, exporting 1,300,000 MT, 680,000 MT and 430,000 MT respectively, according to the report.

“In the long term, the winners of the current economic downturn will be those organisations that can track and anticipate the challenges and opportunities in the milk ingredients market industry,” stated 3A. “The information and analysis contained within this report provide dairy and other food ingredient companies with an important navigational.”

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