In an era of tumultuous geopolitical shifts and unpredictable market developments, the dairy trade flourishes, navigating through peaks and troughs. According to Rabobank's recently published World Dairy Map, the global dairy trade increased by 1.1 percent annually between 2017 and 2022. This document sheds a sharp light on the dynamics of dairy trade flows, revealing notable shifts and trends.
While the total trade volume in 2022 slightly decreased to 90.6 billion kg, the overall trend is evident: the dairy trade remains a growth sector. Noteworthy trade flows, such as those from New Zealand to China and the U.S. to Mexico, signify that even a minor shift in these streams could be a potential catalyst for global dairy market changes.
The period from 2017 to 2022 witnessed global disruptions, ranging from the COVID-19 pandemic to geopolitical tensions. Nevertheless, the structure of the dairy trade remained largely intact, showcasing remarkable stability amidst global uncertainties.
The United Kingdom's departure from the European Union opened new perspectives on trade flows within Western Europe. In 2022, the UK became the EU's largest dairy trading partner, playing a crucial role in the global dairy market.
China continues to be the largest importer of dairy products, with an import volume in 2022 twice as large as the second-largest importer, Mexico. Meanwhile, the U.S. made steady progress and gained market share in dairy exports, despite the challenges posed by the pandemic and disruptions in global trade channels.
The global dairy market faced significant shocks during the COVID-19 crisis, with disruptions in supply chains and freight transport. The strong U.S. dollar and the 'super cycle' of commodity prices added additional layers of complexity to trade dynamics.
While Rabobank predicts continued growth in the dairy trade in the medium term, it also highlights potential shifts. New Zealand and the EU will remain dominant, but moderate growth in milk production could alter dynamics. The U.S. is expected to increase its market share, driven by an expansion of domestic milk production.
The global dairy market remains resilient, but industry players are evaluating their supply chains for vulnerabilities. European players, in particular, face the challenge of capitalizing on global growth amid geopolitical risks and protectionist trade policies. Developments like Fit for 55 and Farm to Fork within the EU directly impact milk supply and dairy products for international markets in a world of heightened uncertainty.
Click here for the World Dairy Map.
Photo: RS 74/Shutterstock.com
Source: Rabobank
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