Asia Pacific continues to drive milk ingredients market

The market for milk ingredients has changed and moved into a new period of supply and demand imbalance with resulting price volatility, according to a report The World Market for Milk Ingredients 2008-2011 by 3A Business Consulting.

Despite the current build-up of stocks and consumer pessimism, the report says there are clear signs of milk supply reductions that will rebalance the market and provide the stimuli for future volume and value growth.

The world market for milk ingredients continues to grow by 3% annually in volume terms, but in terms of value, it is significantly down, as commodity prices have fallen by approximately 40-50% from their peak in the summer of 2007.

However, the prices of the higher added-value milk ingredients such as milk protein isolates and milk protein hydrolysates have not shown the same volatility as the commodities whole milk powder, skimmed milk powder, casein and caseinates.

Currently, it is estimated that the world market for milk ingredients is worth approx. $19 billion in 2008.

Despite the crisis, the main drivers for dairy still remain intact – the world’s population continues to grow, living standards in the long-term are improving, dairy consumption is increasing especially in the Asian-Pacific nations, and consumers are increasingly being motivated to buy products from a health and wellness perspective.