October 22, 2015
A peek at the Philippine dairy market
The Philippinescontinues to be a major global importer of dairy products, producing only less than 1% of its dairy requirement of 1.991 million metric tonnes in 2014, according to a dairy and dairy products situationer on the Southeast Asian country released by the US Department of Agriculture on Tuesday, October 20.
Citing data from the Philippine National Dairy Authority (NDA), the USDA Foreign Agricultural Service''s Global Agricultural Information Network (GAIN) report said that local dairy production is projected to reach 21,000 metric tonnes in 2015, up from 20,010 MT in 2014 and 19,530 MT in 2013.
On the other hand, total 2015 imports of dairy products are forecast to reach 1.800 million metric tonnes from 1.740 MMT in 2014, as local demand stays strong.
Local milk production, which amounted to P629 million (US$13.56 million) in 2014, will likely continue to expand annually due to strong demand for fresh milk and growing dairying capabilities, the GAIN report said.
The report said that according to NDA, one out of every three glasses of fresh liquid milk (not reconstituted from powder) consumed in the Philippines is produced locally. "With dairy production in the country being more community-based, maintaining the quality of fresh milk is a challenge due to the lack of processing and distribution systems, and a dependable, continuous cold chain" it said.
New Zealand biggest supplier
The report said the shortfall in the local supply of milk and dairy products was met by New Zealand (with 30% share of total imports), the US (with 24%) and Australia (7%), among others. "US dairy exports to the Philippines have increased dramatically over the last five years and have continued to increase in market share", the USDA noted, adding the Philippines was the fourth-largest market for US dairy products in terms of value at $422 million (up 16 percent) last year. Imports in 2016 would continue to rise as demand would outpace any increase in domestic production, the report added.
Though the Philippines, with a strong economy and a growing population of around 102 million, is a large market for milk and milk products, its annual per capita milk consumption is comparatively low at 22 kilogrammes, based on the estimates of the UN Food and Agriculture Organisation. In comparison, Thailand''s annual per capita milk consumption is 26 kg, and that of Malaysia is 52 kg, and the US 287 kg.
The USDA report sees milk consumption growing strongly in the long term, citing such factors as expanding cold chain capacity, an increase in the number of supermarkets, and a blossoming food processing industry.
At present, dairy products represent the Philippines'' third-largest agricultural import after wheat and soybean meal, with skim milk powder and whole milk powder constituting about 59% of total dairy imports.
Also an exporter
The Philippines also exports dairy products, using mostly imported dairy products as raw materials. Its total dairy exports in 2014 increased 43% from 2013, with whole milk powder constituting 60% of total dairy export volume, up 33% in 2014 from the previous year.
Other major dairy exports, according to the USDA GAIN report, included ice cream (21% of total volume) and evaporated liquid milk (8%). The main countries of destination were Malaysia (43%), Thailand (28%) and Nigeria (3%). "Exports in 2015 are expected to continue to rise due to growing demand from other ASEAN (Association of Southeast Asian Nations) neighbors".
The report also states that because of poor feed and management practices, high production costs and a lack of an adequate dairy infrastructure, the average Philippine milk production per animal remains low at 8 liters a day. In comparison, the average daily milk yield in the US is around 30 liters/day and about 20 liters/day in the UK. --Rick Alberto