Global dairy trade grows despite pandemic

By Kat Jack

Global trade of dairy products* increased by 2.8% in 2020, in spite of the impact the pandemic had on markets and economies, according to the latest report from Eucolait. Performance among the different product categories was mixed. Trade in cheese, WMP and whey powder all increased. Global exports of butter and SMP were down on the year, but this was due to very high volumes being traded in 2019.

The EU+UK was the largest exporting block, accounting for 31% of export volumes in milk equivalent. New Zealand and the US are the second and third largest exporters respectively. China was the largest import market, boosted by its recovered demand for whey powder after a drop in 2019.

Cheese

Global cheese trade grew by 2% in 2020, with EU+UK exports growing by 7%. EU+UK cheese exports to Japan grew 13%, aided by a new trade deal; in contrast, the aircraft dispute and retaliatory tariffs meant exports to the US fell 10%.

The EU+UK also managed to gain a small amount of the global market share for cheese, at the expense of the US, New Zealand and Australia in 2020.

Butter

Global butter trade fell 8% in 2020 compared to 2019, but the EU+UK bucked the trend and grew exports by 17%. This growth was supported by competitive pricing, with exports particularly high in the first half of the year. However, the other top exporter New Zealand, regained ground in the latter half of 2020.

Milk powder

Powder trade was mixed, with some powders growing in trade but others shrinking. In 2019, SMP exports got an extra boost from Europe clearing intervention stocks, so 2020 was lower in comparison.

China was the top destination for both WMP and SMP, despite lower imports of both compared to 2019. 2020 was the first time since the 2013/14 peak that China was the top SMP importer.

UK

For the UK, dairy trade was down overall in 2020 as the pandemic hit demand in its main destination; the EU. Looking forward, dairy trade is expected to increase as the world recovers from the pandemic. The WTO has predicted a ‘strong but uneven’ recovery for overall global trade in 2021, with the total merchandise volume up 8% on 2020. While demand in the UK and its export destinations should recover, trade friction from having fully left the EU has already impacted early 2021 exports, and could impact on how much the recovery benefits our exports. 

*Notes on the dataset:

• Figures in this article count the EU+UK as one trading block for 2020, so trade between these countries is not included in world totals
• The Eucolait report is based on data from Trade Data Monitor (TDM) and as such only includes data from countries available in TDM. It is therefore not a fully accurate illustration of global trade flows. In the main importers category, for key countries for which no data is available on TDM, namely Algeria, Nigeria and Oman, we have used available export data of other countries to create an estimate of the import volumes.

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