Asian demand may boost production

By Country News on January 20, 2016

The Australian dairy industry has an opportunity to increase milk production from 9.2 billion to 15 billion litres per year due to the growing demand from Asian countries, according to new research.


Most of Australia’s dairy exports are to Asian countries - the key markets being China, Japan and Indonesia - and accounted for around 75 per cent of the total export value in 2014.


According to the research report, Looking for a Sign, released by the ANZ in October, greater China (including Hong Kong and Macau) is now the most important export market for Australia, accounting for 19 per cent of exports by both volume and value.


ANZ general manager of regional business banking Christine Linden said Australia’s agricultural sector was crucial for the future prosperity of the economy and its growth offered substantial employment opportunities on farms, in processing and in the services sectors.


“As we benefit from Asia’s growing population and expanding middle class, we need a renewed focus on agriculture and the dairy sector in particular, to help underpin a stronger and more profitable regional Australia,” Ms Linden said.


The report highlighted the need for the Australian dairy industry to innovate and embrace new approaches, which may be restricted by key industry issues such as a fragmented dairy supply chain.


The report said although Australia currently only accounted for around two per cent of the world’s milk production, there was potential for all dairy export products to increase due to the rapid growth of the Asian middle classes and their increased preference for dairy in their diets.


ANZ’s head of agribusiness Mark Bennett said the report showed that domestic dairy consumption had “barely changed” in the past decade and this could be offset by the opportunity presented by the Asian market.


According to one of the report’s key findings, the recent wave of acquisitions and large scale investments from multinationals indicate Australia is being recognised as a reliable and profitable destination for dairy investment.

By Country News on January 20, 2016

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