Dairy Exports from India 2013

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Dairy Exports from India 2013

  1. 1. Promoting Dairy Exports from India:Emerging Challenges and Strategic Response Dr. Rakesh Mohan Joshi Professor and Chairperson International Projects Division Indian Institute of Foreign Trade New Delhi INDIA and Project Director, India Africa Institute of Foreign Trade, Kampala, Uganda www.rakeshmohanjoshi.com
  2. 2. How Global is the Dairy Industry?• Only 7% of the milk produced worldwide is internationally traded• Expected growth in milk production and consumption of dairy products in developing countries would further reduce the ratio to 6% in the next decade• Thus, the focus of Dairy Industry remains local rather than global at the most regionalJanuary 15, 2013 Joshi, Rakesh Mohan 2
  3. 3. Globalization of Dairy Industry• Growth in International Trade at 3% per annum surpassed the growth of 2% in world dairy Production during the last decade• This reveals rapidly growing significance of international trade and rising integration of global production patterns and markets• International Dairy Markets have witnessed a paradigm shift from being supply driven to become demand driven getting increasingly responsive to market signals and consumer preferences rather than merely by excess production and depressed pricesJanuary 15, 2013 Joshi, Rakesh Mohan 3
  4. 4. Growing Significance of Developing Countries in International Dairy Trade• The traditional dominance of developed countries in the world dairy markets seems to be waning• World milk production is projected to increase at an annual average of 1.9 % during to the next decade compared to 2.1% in the previous decade• 73% of the additional milk production in the next decade is likely to come from developing countries out of which India and China would account for 38% of the global gainsJanuary 15, 2013 Joshi, Rakesh Mohan 4
  5. 5. Developed Countries Still Use High Level of Protectionism for their Dairy Industry Cross Country Comparison of Tariff Structure for Dairy Product (2011) Average Bound Average Applied Country (%) (%) Canada 218.5 126.6 Japan 118.1 93.3 EU 50.5 48.3 India 65 33.7 US 19.8 20.3 Source: WTO Tariff Profile, WTO , 2011January 15, 2013 Joshi, Rakesh Mohan 5
  6. 6. World Milk Production (in Million Tons) India’s milk production to equal that of whole EU by 2021180 166 158160 149140 117120 103100 87 80 60 60 43 38 38 40 32 36 33 31 24 17 17 20 11 13 11 11 12 9 11 0 European India USA China Russia Pakistan Brazil New Ukraine Argentina Australia Mexico Union Zealand 2009-11 2021
  7. 7. Production and Per Capita Availability of Milk in the World 300 140 273 266 251 260 116.4 120 250 233 112.2 107.9 217 102.6 100Productionh (Million TOnnes) 92.5 Per Capita Availability(gms/day) 200 182 176 178 80.6 80 128 150 130 126 112 55.7 58 53.9 60 100 40 31.6 20 22 50 17 20 0 0 1950-51 1960-61 1970-71 1980-81 1990-91 1991-92 1992-93 2000-01 2004-05 2006-07 2007-08 2008-09 2009-10 Production (million Tonnes) Per Capita Availibility (gms/day)
  8. 8. World Milk Yield (Tons/ Head)12 11.410 9.4 8 7 6.5 6.2 6 5.9 5.9 5.1 4.8 4.5 4.8 4.3 4 3.6 3.7 4 3.4 3.2 2.8 2 1.3 1.4 1.3 1.2 1 1.2 0 2008-10 2020
  9. 9. World Dairy Export (in US $ Billion) 80 75 70 66 64 57 60 50 44 52 42 39 40 32 28 27 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011January 15, 2013 Joshi, Rakesh Mohan 9
  10. 10. World’s Major Dairy Exporting Countries 2000 2009 Rest Of the Rest Of the World New ZealandArgentina World 17% 19% New Zealand 3% 24% 27% Belarus 2% Argentina 3% USA 5% Belarus 5% Australia EU 27 16% EU 27 38% USA 8% 24% Australia 9% January 15, 2013 Joshi, Rakesh Mohan 10
  11. 11. Composition of World Dairy Exports 2001 2010 Whey and Buttermilk natural milk Whey and and yogurt products Buttermilk natural milk 6% 4% and yogurt products 6% 6%Butter andother milk- Butter and fats other milk 10% fats Cheese and 11% curd Cheese and Milk and 40% curd cream, not 40% Milk andconcentrated cream, not nor concentrate sweetened Milk and Milk and d nor 10% cream, conce cream, conc sweetened ntrated or 11% entrated or sweetened sweetened 30% 26% January 15, 2013 Joshi, Rakesh Mohan 11
  12. 12. US$ Per Ton US$ Per Ton 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 0 1000 2000 3000 4000 5000 6000 7000 8000 90001990 19901991 19911992 19921993 19931994 19941995 19951996 19961997 19971998 19981999 19992000 20002001 20012002 20022003 20032004 20042005 20052006 2006 20072007 20082008 (In real terms) 20092009 (In nominal terms) 20102010 20112011 20122012 20132013 20142014 20152015 Trends in International WMP and SMP Prices 20162016 20172017 20182018 20192019 20202020
  13. 13. US$ Per Ton US$ Per Ton 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 0 500 1000 1500 2000 2500 3000 3500 4000 45001990 19901991 19911992 19921993 19931994 19941995 19951996 19961997 19971998 19981999 19992000 20002001 20012002 20022003 20032004 20042005 20052006 20062007 20072008 2008 (in real terms)2009 2009 (in nominal terms)2010 20102011 20112012 20122013 2013 Trends in International Butter Prices2014 20142015 20152016 20162017 20172018 20182019 20192020 2020
  14. 14. US$ Per Ton US$ Per Ton 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 19901990 19911991 19921992 19931993 19941994 19951995 19961996 19971997 19981998 199919992000 20002001 20012002 20022003 20032004 20042005 20052006 20062007 2007 (in real terms)2008 2008 (in nominal terms)2009 20092010 20102011 20112012 20122013 2013 Trends in International Cheese Prices2014 20142015 20152016 20162017 20172018 20182019 20192020 2020
  15. 15. India’s Dairy Trade (in US $ Million)300 270250200 177 169 156150 147 115 109100 89 75 63 50 26 51 42 40 3 22 14 4 25 16 14 13 15 10 11 13 1 8 4 5 27 8 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 EXports Imports
  16. 16. Composition of India’s Dairy Exports 2001 2011 Butter and other Buttermilk and fats and oils yogurt Buttermilk and Whey and Milk and derived from 0.15% Cheese and Milk and yogurt natural milk cream, not milk curd cream, not 1.1% products nes concentrated 12.68% 0.84% concentrated nor 0.8%nor sweetened sweetened 0.03% 7.2% Whey andnatural milkproducts nes Cheese and curd 2.79% 11.1% Milk and Milk and cream, concentr cream, concentr ated or ated or Butter and other sweetened sweetened fats and oils 83.51% 15.3% derived from milk 64.6%
  17. 17. Composition of India’s Dairy Imports 2001 2011 Milk and cream, not concentrated nor Butter and other Milk and sweetened fats and oils Buttermilk and cream, not 0.19% derived from yogurt concentrated nor Milk and milk 0.2% sweetened cream, concentra 1.3% Cheese and curd 0.2% ted or sweetened 18.21% 4.2% Whey and natural milkCheese and curd Buttermilk and products nes 19.95% yogurt 11.1% 0.49% Whey and natural milkButter and other products nes fats and oils 19.61% derived from Milk and milk cream, concentr 41.56% ated or sweetened 83.0%
  18. 18. Direction of India’s Dairy Imports 2001 2011 United Arab Emirates Japan 0% Others 1% Nepal 3%United Kingdom 4% Others 5% 24% New Zealand New Zealand 15% 30% Japan Netherlands 3% 1% Denmark 12% United Arab EmiratesUnited States of 1% America Nepal 1% 1% Australia United Kingdom 21% 1% Germany Netherlands 1% 1% Denmark 2% United States ofGermany America 5% Australia 3% France 20% France 34% 11%
  19. 19. Direction of India’s Dairy Exports 2001 2011 United Arab Others Emirates 22% 23% United Arab Emirates Others 23.4% 32.0% United States of America 3% Egypt 3.4% Morocco 3%United States of Nepal America 2.1% 1.2% Australia Egypt 4% 15%Australia Singapore 0.1% 1.0% Saudi Arabia 4%Morocco 0.1% Oman 4%Saudi Arabia Oman Bangladesh Singapore Nepal 2.9% 6.9% Bangladesh 6% 7% 9% 26.9% January 15, 2013 Joshi, Rakesh Mohan 19
  20. 20. INTERNATIONAL DAIRY TRADE AND CHALLENGES FOR INDIA• Growth in milk Production not keeping pace with surge in Demand is expected to rise milk imports in coming years• Gradual opening up of Indian market for imports and with the entry of MNCs in the dairy sector, competition in the high value added segment and branded dairy products has rapidly intensified in the recent years and is likely to grow with their fierce marketing strategies, operational efficiencies and global supply chain management.• India as a nation is tend to loose more by importing value added and branded milk products than basic milk constituents such as butter oil or milk powdersJanuary 15, 2013 Joshi, Rakesh Mohan 20
  21. 21. Bring Innovation to Compete in International Markets – Innovation across the dairy value chain – Increase emphasis on value added products, consistently Explore Product Differentiation and build brands that have capacity to compete and survive the fiercely growing competition from multinational players – Invest in R&D, develop New Products, plan Product Obsolesce to Pave Way for New Products – Develop a few national brands on the pattern of Amul and taking them internationally – Resort to competitive marketing strategies – Employ innovation to enter international markets including setting up overseas operations and internationalization of Research and off-shoring dairy servicesJanuary 15, 2013 Joshi, Rakesh Mohan 21
  22. 22. January 15, 2013 Joshi, Rakesh Mohan 22

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