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Philippine dairy imports seen declining by 10%

Philippine dairy imports seen declining by 10%

MANILA: Philippine dairy imports this year may decline by almost 10 percent to 2.5 million metric tons liquid milk equivalent (MMT-LME), from a record-high of 2.77 MMT-LME last year, according to the latest Global Agricultural Information Network (Gain) report. The Gain report, which was prepared by the United States Department of Agriculture’s Foreign Agricultural Service (USDA-FAS) in Manila, said imported milk has become more expensive as global prices has started to recover.

“According to the NDA [National Dairy Authority], total imports of dairy products reached a record 2.77 MMT-LME in 2016 on low global dairy prices and strong local demand. Stocks were accumulated during this period of low prices, as well,” the Gain report read. “[FAS Manila] expects imports in 2017 to decline slightly to 2.5 MMT-LME as global dairy prices begin to recover and domestic stocks remain high,” it added. The report noted that the country’s skim-milk powder (SMP) imports this year are expected to decline from a record level last year. It added that whole-milk powder (WMP) imports will also decline “modestly” based on rising global milk prices. Data from the USDA-FAS in Manila showed that the country’s SMP imports this year may reach 1.283 MMT-LME, 13.5 percent lower than the 1.483 MMT-LME recorded last year. WMP imports may also decline by 18.18 percent to 1443,360 metric tons (MT), from 176,440 MT last year, according to the data of the USDA-FAS in Manila. SMP and WMP imports comprise almost 60 percent of the Philippines’s dairy imports annually. However, the Gain report said Philippine imports of liquid milk and butter are expected to increase this year on the back of higher demand from the local food service sector. “In 2017 liquid-milk imports should increase slightly due to rising consumption and increased use in food service,” the report read.

“Imports of butter and other dairy spreads, as well as cheese, should continue to rise, mainly coming from New Zealand and Australia, due to the duty-free advantage of those suppliers and also as a result of increasing demand for the products from the expanding middle class, growing fast-food industry and hotel and restaurant sectors,” it added. Australia and New Zealand both benefit from Association of Southeast Asian Nations agreements that grant access for dairy products at zero-percent duty, according to the Gain report. The Gain report data showed that the country’s liquid-milk imports this year would rise by 4.16 percent to 50,000 MT, from 48,000 MT recorded in 2016. The report noted that the country’s purchases of imported cheese this year would reach 132,240 MT-LME, 9.09 percent higher than the 121,220 MT-LME a year ago. The country’s dairy imports in the first half of the year declined by 8.8 percent to 1.265 MMT-LME, from 1.387 MMT-LME last year, according to the NDA, an attached agency of the Department of Agriculture.

In terms of value, however, figures from the NDA showed that the country’s milk imports during the January-to-June period rose by nearly 20 percent to P22.641 billion, from P18.911 billion a year ago. NDA Administrator Marilyn B. Mabale told the BusinessMirror that payments went up because imported milk became more expensive. “Based on our data, [the price] of imported milk powder rose by almost 30 percent.” The major dairy suppliers to the Philippines by volume are New Zealand with a 39-percent share of total imports by volume; the US, 24 percent; and Australia, 6 percent, according to the Gain report. “Dairy products are currently the country’s third-largest agricultural import after wheat and soybean meal,” it added.