Long-term outlook positive

The long-term outlook for the dairy industry is positive. A recent study by Tetra Pak shows that total milk demand will exceed total production by 2018. Demand growth will largely take place in Asia and Africa, areas where the possibilities of increasing production is severely hampered by physical constraints such as climate and infrastructure. Chinese demand will remain a major driver of global demand. Domestic demand in China is growing and Chinese consumers trust the quality of imported dairy products. Chinese dairy product imports are expected to double in the next decade.

The African market is also expected to grow. The Nigerian population is set to grow by 20 million by 2018, providing a high potential for demand growth. While the African economies are growing, difficult climatic conditions, expensive and unreliable electricity and weak infrastructure will limit domestic dairy production growth and the region will largely remain a net importer of dairy products.