Butter, dairy spreads and milk fats market in Bhutan

Earlier Report Observations

The butter, dairy spreads, and milk fats market in Bhutan contracted from 4 743 t in 2018 to 4 122 t in 2021, despite initial growth in domestic production. This decline was largely due to a steep fall in imports, which dropped from 847 t to 262 t over the period. Local production had risen to 4 252 t in 2019, supported by dairy sector development programs focusing on breed improvement, pasture enhancement, and the introduction of artificial insemination, but the overall market volume shrank as imports dwindled.

A further market contraction to 3 327 t occurred in 2022, coinciding with the implementation of the Bhutan Trade Classification & Tariff Schedule 2022, which established new composition standards for butter and dairy spreads, prohibiting additives like emulsifiers. This regulatory change was followed by a production drop to 3 016 t. The market recovered to 3 818 t in 2023 as production rebounded to 3 431 t, driven by the adoption of advanced sexed semen artificial insemination technology and pasture improvement initiatives by the Ministry of Agriculture and Livestock, which boosted milk and butter output according to the 2023 Integrated Agriculture and Livestock Census.

Consumer preferences in Bhutan shifted towards functional and fortified dairy products, including butter and spreads with health benefits, supporting underlying demand. In 2025, India's removal of export restrictions on agricultural products to Bhutan ensured a continuous supply of imported butter and milk fats, facilitating access to these goods.

Production butter, dairy spreads and milk fats in Bhutan

In kind, 2018-2021, t

Top producers of butter, dairy spreads and milk fats, 2018-2021

World map of production of butter, dairy spreads and milk fats, 2018-2021

Bhutan's production of butter, dairy spreads, and milk fats has declined for the second year in a row. In 2021, the country produced 3,860 tonnes, marking a modest decrease of 8.0% from the previous year. Production peaked in 2019 at 4,252 tonnes, which also saw the largest annual increase of 9.1%.

Annual dynamics of production in Bhutan in kind, 2018-2021, t

Exports butter, dairy spreads and milk fats from Bhutan

Exports in kind, t

Export volumes showed significant fluctuations during this period. In 2019, exports reached their highest point at 0.3 tonnes, but by 2021, they had fallen to 0.0 tonnes—a dramatic 14-fold drop. The 2021 figure represents a sharp decline of 90.1% compared to the year before. The largest increase occurred in 2019, with a growth rate of 98.7%.

Annual dynamics of product's exports from Bhutan in kind, 2018-2021, t

From 2018 to 2021, India was the overwhelming destination for Bhutan's butter, dairy spreads, and milk fats exports, accounting for 96.7% of the total volume.

Structure of product's exports in kind by countries, 2018-2021

World map of product's exports from Bhutan in kind, 2018-2021

Exports in value, K $ US

Export values experienced notable volatility. They peaked in 2019 at 1,000 US dollars, then plummeted to a low of 100 US dollars in 2021—a 15-fold decrease. The 2021 value was 92.4% lower than in the previous year. The largest increase was recorded in 2019, at 35.9%.

Annual dynamics of product's exports from Bhutan in value, 2018-2021, K $ US

During 2018–2021, India dominated Bhutan's butter, dairy spreads, and milk fats exports in value terms, capturing 97.3% of the total.

Structure of product's exports in value by countries, 2018-2021

World map of product's exports from Bhutan in value, 2018-2021

Imports butter, dairy spreads and milk fats to Bhutan

Imports in kind, t

Bhutan's imports of butter, dairy spreads, and milk fats have fallen for three consecutive years. In 2021, imports totaled 261.5 tonnes, down 8.0% from 2020. Over the entire period from 2018 to 2021, imports dropped by 69.1%, averaging an annual decline of 32.4%.

Annual dynamics of product's imports to Bhutan in kind, 2018-2021, t

Between 2018 and 2021, India was virtually the sole source for Bhutan's imports of butter, dairy spreads, and milk fats by volume, representing 100.0% of the total.

Structure of product's imports in kind by countries, 2018-2021

World map of product's imports to Bhutan in kind, 2018-2021

Imports in value, K $ US

After two years of decline, Bhutan's imports of butter, dairy spreads, and milk fats in value terms rebounded in 2021, reaching 1,395,000 US dollars—an 11.0% increase from 2020. However, over the 2018–2021 period, imports decreased by 7.3%, with an average annual drop of 2.5%. The lowest point was in 2020 at 1,257,000 US dollars, which saw the largest decline of 13.1%.

Annual dynamics of product's imports to Bhutan in value, 2018-2021, K $ US

From 2018 to 2021, the import market was highly concentrated, with India accounting for 99.8% of Bhutan's total import value for butter, dairy spreads, and milk fats.

Structure of product's imports in value by countries, 2018-2021

World map of product's imports to Bhutan in value, 2018-2021