Asia's Milk Production Is Expected to Increase by 2% in 2020

IndexBox has just published a new report: 'Asia - Whole Fresh Milk - Market Analysis, Forecast, Size, Trends and Insights'. Here is a summary of the report's key findings.

After four years of growth, the Asian whole fresh milk market decreased by -2.1% to $309.6B in 2019. The market value increased at an average annual rate of +4.0% over the past decade. The pace of growth was the most pronounced in 2010 with an increase of 15% y-o-y. Over the period under review, the market attained the maximum level at $316.1B in 2018 and then dropped slightly in the following year.

Consumption by Country in Asia

India (198M tons) remains the largest whole fresh milk consuming country in Asia, accounting for 54% of total volume. Moreover, whole fresh milk consumption in India exceeded the figures recorded by the second-largest consumer, Pakistan (47M tons), fourfold. The third position in this ranking was occupied by China (35M tons), with a 9.6% share.

From 2009 to 2019, the average annual rate of growth in terms of volume in India totaled +5.4%. The remaining consuming countries recorded the following average annual rates of consumption growth: Pakistan (+3.2% per year) and China (-1.2% per year).

In value terms, India ($146.8B) led the market, alone. The second position in the ranking was occupied by Pakistan ($37.3B). It was followed by China.

The countries with the highest levels of whole fresh milk per capita consumption in 2019 were Uzbekistan (339 kg per person), Turkey (281 kg per person), and Pakistan (231 kg per person).

From 2009 to 2019, the biggest increases were in Uzbekistan, while whole fresh milk per capita consumption for the other leaders experienced more modest paces of growth.

Market Forecast 2020-2030

Driven by increasing demand for whole fresh milk in Asia, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +2.4% for the period from 2019 to 2030, which is projected to bring the market volume to 477M tons by the end of 2030.

According to FAO projections, Asian production is expected to increase by 2% in 2020 due to expected growth in India, Pakistan, and China, while Turkey may experience a decline. India, the world's largest milk producer, is projected to increase production by 2.6 percent, or 5 million tons. The increase expected this year reflects the efforts of the vast network of rural cooperatives that have been mobilized to maintain milk collection despite the pandemic lockdown. Given the loss of sales in the foodservice industry due to the COVID-19 lockdown, large volumes of milk were sent for processing to drying plants, which were reported to operate at almost full capacity.

Pakistan's milk production is projected to increase by an average of 3% due to an increase in the herd population.

In China, where the sector has been recovering since 2018, it is projected that milk production will increase by almost 3% in 2020, amid ongoing consolidation of farms and increased efficiency of large dairy enterprises. The introduction of stringent food safety standards by the government has also increased consumer confidence in Chinese milk, which has helped support domestic production growth.

According to FAO forecasts, milk production in Japan will grow, which will be supported by the government measures offered to farmers to manage excess milk supplies and stabilize prices. This is despite a drop in milk consumption in the first months of the year after the government declared a state of emergency and closed schools amid concerns about COVID-19.

Production in Asia

In 2019, production of whole fresh milk in Asia rose to 368M tons, picking up by 3.8% against the previous year. The total output volume increased at an average annual rate of +3.6% from 2009 to 2019; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The pace of growth was the most pronounced in 2017 with an increase of 4.8% y-o-y. The volume of production peaked in 2019 and is expected to retain growth in the immediate term. The generally positive trend in terms of output was largely conditioned by a moderate increase in the number of producing animals and a tangible expansion in yield figures.

Production By Country in Asia

India (198M tons) remains the largest whole fresh milk producing country in Asia, accounting for 54% of total volume. Moreover, whole fresh milk production in India exceeded the figures recorded by the second-largest producer, Pakistan (47M tons), fourfold. China (35M tons) ranked third in terms of total production with a 9.5% share.

In India, whole fresh milk production expanded at an average annual rate of +5.4% over the period from 2009-2019. In other countries, the average annual rates were as follows: Pakistan (+3.2% per year) and China (-1.4% per year).

Producing Animals in Asia

In 2019, the amount of producing animals in Asia expanded modestly to 427M heads, rising by 1.8% against the previous year. This number increased at an average annual rate of +1.5% over the period from 2009 to 2019; the trend pattern remained relatively stable, with only minor fluctuations being recorded throughout the analyzed period. The pace of growth appeared the most rapid in 2010 with an increase of 3.2% against the previous year. The level of producing animals peaked in 2019 and is expected to retain growth in the near future.

Yield in Asia

The average whole fresh milk yield amounted to 860 kg per head in 2019, picking up by 2% on the year before. The yield figure increased at an average annual rate of +2.1% over the period from 2009 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The growth pace was the most rapid in 2014 with an increase of 5.2% y-o-y. Over the period under review, the whole fresh milk yield attained the maximum level in 2019 and is expected to retain growth in the near future.

Exports in Asia

In 2019, after two years of decline, there was growth in overseas shipments of whole fresh milk, when their volume increased by 2.6% to 305K tons. Total exports indicated moderate growth from 2009 to 2019: its volume increased at an average annual rate of +3.9% over the last decade. Based on 2019 figures, exports decreased by -27.9% against 2014 indices. The growth pace was the most rapid in 2010 when exports increased by 50% y-o-y. The volume of export peaked at 423K tons in 2014; however, from 2015 to 2019, exports remained at a lower figure.

In value terms, whole fresh milk exports expanded to $311M (IndexBox estimates) in 2019.

Exports by Country

The shipments of the twelve major exporters of whole fresh milk, namely Kuwait, Kazakhstan, Turkey, Thailand, China, the United Arab Emirates, Pakistan, India, Kyrgyzstan, China, Hong Kong SAR, South Korea, and Vietnam, represented more than two-thirds of total export.

From 2009 to 2019, the most notable rate of growth in terms of shipments, amongst the main exporting countries, was attained by Kazakhstan (+53.2% per year), while exports for the other leaders experienced more modest paces of growth.

In value terms, Kuwait ($62M), Thailand ($49M), and Turkey ($25M) were the countries with the highest levels of exports in 2019, with a combined 44% share of total exports. China, Hong Kong SAR, the United Arab Emirates, Kazakhstan, South Korea, Pakistan, India, Vietnam, and Kyrgyzstan lagged somewhat behind, together comprising a further 41%.

Kazakhstan saw the highest rates of growth with regard to the value of exports, among the main exporting countries over the period under review, while shipments for the other leaders experienced more modest paces of growth.

Export Prices by Country

The whole fresh milk export price in Asia stood at $1,020 per ton in 2019, approximately reflecting the previous year.

There were significant differences in the average prices amongst the major exporting countries. In 2019, the country with the highest price was Hong Kong SAR ($2,147 per ton), while Kazakhstan ($423 per ton) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by Hong Kong SAR, while the other leaders experienced more modest paces of growth.

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Source: IndexBox Market Intelligence Platform