AUSTRALIAN success in the growing Asian dairy markets is not guaranteed.
That’s according to a new Rabobank report which found dairy imports into Indonesia, Thailand, Malaysia, Singapore, the Philippines and Vietnam totalled more than 1.6 million tonnes in 2012.
The report said demand for dairy was growing quickly in those regions thanks to favourable economic and demographic conditions, with local supply also unable to keep pace.
It was expected these markets would collectively consume an extra three billion litres of milk by 2020 due to an annual consumption increase of 2.4 per cent.
But Rabobank analyst Michael Harvey said those countries were still price sensitive and the US had started to move into these markets.
To unlock the full potential of the region he said exporters needed to rethink their export strategies.
«Do you just remain a traditional exporter and sell product to the higher bidder or become more actively engaged in these markets?» Mr Harvey said.
He said engagement could range from establishing offices in the region, which some Australian dairy processors have already done, or work with local companies.
This closer co-operation would help deliver better returns to farmers from the price-sensitive market to help with the rising cost of production.
Sixty per cent of the trade into that region is still skim milk powder and whole milk powder, but Mr Harvey said value could be added to those bulk ingredients with specialty products.
He said exporters to the region would need to continue to «stretch» dairy ingredients with local produce such as vegetable oil to help affordability.
Australia has a freight advantage to these regions, but it must continue to work with its customers to ensure future export success.
«Europe and New Zealand have always been big exporters, but the US has really ramped it up in the region in the past 10 years,» Mr Harvey said.
Leprino Foods has become the first US dairy company to establish a presence in Singapore.
Mr Harvey said scale was important when exporting to those countries, but not as vital as consistency of supply.
Source: Â Weekly TImes
