The UK’s exit from the European Union has “reset” western European dairy trade, according to a new report published today (Wednesday, November 29).
Rabobank’s World Dairy Map 2023 report highlights that Brexit was one of the key global events that impacted on the shape and size of dairy trade flows between 2017 and 2022.
Michael Harvey, senior analyst at Rabobank, said any subtle shifts in the volume of trade flows in major markets such as EU exports to the UK, New Zealand’s volume of trade to China and the flow of milk from Belarus to Russia “can have a profound impact on global dairy market fundamentals”.
However, Harvey said global dairy remains a “growth sector” despite recent declines from 2021’s record highs.
Its latest report shows that dairy trade exceeded “3 billion kg in 2022” across the globe.
According to Rabobank, New Zealand remains the “global export powerhouse”, as the world’s largest dairy exporting country, accounting for 21% of trade.
China remains the largest dairy produce importer, with volumes “double” that of the second-largest importer which is Mexico.
The latest Rabobank report also shows that the EU has the largest export market share – 27.7% – but notes that the US dairy industry is keen to grow its export market share.
According to Harvey, while the bank expects trade growth to continue over the medium-term, “there will be some subtle shifts that have the potential to further reshape the global trade arena”.
Rabobank expects that both New Zealand and the EU will continue to dominate the global dairy market for the “foreseeable future”, because of its “exportable surpluses”.
Harvey has also warned that all dairy companies will be reassessing the supply chain for “vulnerabilities” in an era of heightened geopolitical risks and potential deglobalisation, because of what the bank has described as “protectionist trade policies”.
Rabobank said all players in the dairy supply chain should “buckle up for the ride”.