World milk market in 2020: Many obstacles ahead

Visitors visit milk booths at the International Exhibition on Dairy and Dairy Products. (Photo: Hoang Hai / TTXVN)

The EMR Market Research Company report titled, “The Global Dairy Market Report and Prospects in 2019-2024” predicts that the global market for milk and dairy products will grow. , 5% per year.

Despite facing many “opposite winds”, the ever-increasing demand for dairy products helps the dairy processing industry to receive quite optimistic prospects in the future.

Important “link” in the food chain

Milk is an important part of the food chain that people eat every day. With a wide presence in various food products, milk is considered a microcosm of the food industry, as the dairy consumers' eating habits largely influence the type of food they eat. other products.

According to EMR's report, the dairy market is still on a positive growth momentum, mainly driven by global demand for milk. Demand for milk, especially dairy products such as butter, yogurt, cheese, etc., is tending to “revive” in developed countries because many people have changed their eating habits and are “good.” feel “more with fat milk products in recent years.

In developing countries, consumption of dairy products is also expected to increase thanks to higher incomes, a thriving population and an increasingly globalized diet. In addition, the increasingly efficient and stable milk production process in developing economies also contributes positively to the growth of the dairy processing industry in these markets.

However, per capita consumption of milk and dairy products in emerging economies is forecast to continue to be much lower than in developed countries.

Fresh milk products are more widely consumed in emerging economies such as India and Pakistan, while consumers in developed countries tend to prefer processed milk products. In developed countries, most of the milk produced is processed into cheese, butter, skimmed milk and whole milk powder (SMP and WMP).

Asia is the main dairy consumer market and this region also determines the evolution of the global dairy market. China, India and Pakistan are the leading dairy markets in this region, with growth in milk production mainly from India and Pakistan. Meanwhile, the US – another large dairy market, is also recovering from a period of scarcity of milk supply due to prolonged drought.

Meanwhile, the latest report of Rabobank Bank said that the global dairy market is likely to remain stable in the next six months, with the prospect of strong enough demand to balance the modest supply. . Total milk production of the world's seven leading dairy export markets, including the United States, the European Union (EU), New Zealand, Australia, Brazil, Argentina and Uruguay, is expected to increase by 0.8% by the beginning of 2020.

Notably, unsweetened dairy products are expected to play a role in driving the growth of the dairy market in the coming years. In the US, Europe and China, the proportion of the population not using sugary milk is more than 5%, 10% and 90% respectively. In these markets, sugar-free dairy products are becoming more and more widely available, because according to the majority of people, sugar-free or low-sugar products are considered healthy.

Arranging and transporting school milk at Hanoi warehouse of Vietnam Dairy Products Joint Stock Company (Vinamilk). (Photo: Thanh Tung / VNA)

Growth barriers

Although the demand for milk is still high, Rabobank said that the global dairy industry will still face difficulties in the future.

Warming summer weather in China and Northern Europe is one of the reasons limiting milk supply in the world. In addition, other factors such as increased production costs, low consumer confidence, limited production capacity and strict environmental regulations also affect milk production and processing. .

On the demand side, Rabobank's report said, the significant downward trend of the world economy, the decline of consumer confidence and the trade tensions between countries are still a problem causing “pain. head ”for many milk exporters. In the second quarter of 2019, for example, China announced the lowest GDP growth rate in nearly 30 years and Southeast Asian markets were affected by this.

Meanwhile, the EU faced similar challenges when Germany witnessed an economic downturn in the second quarter of 2019 along with challenges from the UK leaving the EU (also known as Brexit). New Zealand dairy producers are also facing difficulties due to new water regulations recently announced by the Government.

According to Rabobank, China may be outside the optimistic forecast of global dairy demand prospects from now until mid-2020, because strong purchasing power in the first half of 2019 has helped the country have a reserve of milk. pretty big.

In addition, changes in consumers' eating habits, tough competition and global trade disputes are affecting the growth of dairy companies. The survey was conducted based on the performance of some major dairy companies in the world, showing that the accumulated return on investment (ROIC) of these companies decreased by 3% in 2018./.

Minh Trang (VNA / Vietnam +)