A weaker peso and high food prices likely slashed the Philippines’s total milk imports by 15 percent year-on-year to 2.3 million metric tons (MMT) last year, according to the Food and Agriculture Organization (FAO).
FAO projected that the country’s milk and milk products imports in 2023 could have fallen to 2.385 million metric tons (MMT), 421,000 metric tons (MT) lower than the 2.806 MMT recorded in 2022.
The estimated import volume last year is even below the Philippines’s 2.576 MMT average import volume in 2020-2021, according to the UN agency.
FAO noted that the eroded consumer purchasing power due to elevated inflation and currency depreciation slashed the country’s total dairy imports last year. A weaker currency would lead to higher milk prices for the Philippines as it virtually imports all of its dairy requirements annually.
It also said the Philippines contributed to the drop in overall global dairy trade.
“In 2023, international trade in dairy products is forecast at 84.0 million tons [in milk equivalent], down 1.0 percent from 2022, a slower pace of decline than the 4.2 percent registered in 2022,” it said in its latest Dairy Market Review report published recently.
“The anticipated drop in world dairy trade in 2023 is primarily due to likely declines in imports by China, the Philippines, Indonesia, and Malaysia, partially compensated by higher imports by Brazil, Mexico, Algeria, Saudi Arabia, and Australia.”
FAO noted that a contraction is expected across all the various milk products being imported by the Philippines last year, including butter, whey, whole milk powder and skim milk powder (SMP).
“International butter exports are forecast at 1.1 million tons in 2023, a drop of 2.0 percent year-on-year, after reaching a record high in 2022,” it said.
“The drop in trade reflects anticipated declines in imports by China, Indonesia, Bahrain and the Philippines.”
Butter imports in the Philippines were estimated to drop by 8.5 percent year-on-year in 2023, according to FAO.
“Similarly, high inflation and slow economic growth in Indonesia and the Philippines would reduce consumer purchasing power, lowering butter imports by 25.4 percent and 8.5 percent, respectively,” it said.
“[SMP] imports are forecast to drop in the Philippines, Malaysia and Indonesia due to lower consumer purchasing power of some population segments due to high inflation and currency depreciation.”
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