PHL milk imports seen rising on higher demand

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The Philippines’s milk imports this year and next year could reach nearly 3 million metric tons (MMT), according to a report published by an international agency.

The United States Department of Agriculture-Foreign Agricultural Service (USDA-FAS) in Manila said the country’s dairy imports would recover next year following an anticipated increase in demand as the economy “improves.”

“FAS Manila forecasts demand for dairy products to increase 3 percent in 2023, the same percentage of increase as 2022, with a total demand of 3 million metric tons in liquid milk equivalent (LME),” the international agency said in a Global Agricultural Information Network (Gain) report.

“The Philippines imports 99 percent of its dairy requirement, as domestic production cannot meet demand.”

USDA-FAS Manila had released a report on the country’s dairy industry situation last week (Related story: https://businessmirror.com.ph/2022/10/20/report-phl-will-continue-to-rely-on-milk-imports/).

It noted that the country’s dairy consumption last year reached a record level of 3 MMT amid the lackluster local milk production. The USDA-FAS Manila added that total dairy consumption would remain at the 3-MMT level this year and next year.

“With an expanding middle class and a growing population, the Philippines is a large and expanding market for dairy products with annual per capita consumption of 27 kilograms,” it said.

“In comparison, the United States consumes 287 kg per capita of dairy, showing that there remain ample opportunities for food manufacturers to offer more packaged dairy products in the Philippines.”

Production wise, the USDA-FAS Manila projected that local milk output would increase to 32,000 metric tons (MT) next year due to the increase in dairy herd. The country’s estimated dairy output this year is 31,000 MT.

“Post keeps cow’s milk production at 17,000 MT, which represents a 54 percent share of total production. Production will rebound, boosted by more dairy animals and the active implementation of the government’s dairy development projects,” it said.

“Despite improvements in production, the Philippines supplies only 1 percent of its total annual dairy requirement, with the rest imported. Production growth has been slow in previous years because of the inability to increase the dairy herd, mostly due to insufficient funding and little investment from the private sector.”

The Gain report projected that the country’s imports of ready-to-drink liquid milk would grow to 118,000 MT next year from the projected volume of 115,000 MT this year.

“Growth drivers include the expansion of the milk feeding program, and consumption of coffee and milk tea with the opening of more stores and restaurants,” it said.

“Take-out and delivery services will also push demand, as consumers especially in the National Capital Area adjust to online purchases.”

The country’s cheese imports would grow to 48,000 MT from 46,000 MT this year due to an “anticipation” of better prices and improved global supply chain, the USDA-FAS Manila said.

“Moreover, the expansion of fast-food, pizza, and other restaurants will drive increased demand for cheese. Hotels, which are an important market for cheese, should return to full operation in 2023, which will help drive cheese consumption.”

The country’s imports of skim milk powder would recover by 4.5 percent year-on-year to 230,000 MT due to the expansion of the food manufacturing sector to meet increasing consumer demand.

“Post sees [whole milk powder] imports in 2023 at 18,000 MT, the same level as in 2022,” the USDA-FAS Manila said.

“Rising prices deter more importation. Whole milk powder is not a priority among Filipino households with tight budgets, who will opt for cheaper substitutes. Post maintains the current 2022 import estimate at 18,000 MT, a 5 percent drop from 2021, reflecting the effect of high prices.”

Image credits: Junpinzon | Dreamstime.com



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