Butter, dairy spreads and milk fats market in Kenya

Earlier Report Observations

The market volume for butter, dairy spreads, and milk fats in Kenya increased from 33 124 t in 2018 to 40 666 t in 2023. This growth was initially supported by the expanded footprint of the state-owned Kenya Cooperative Creameries (KCC) and later accelerated by the Kenya Dairy Industry Regulations of 2021. These regulations introduced a minimum farm gate price and a Quality-Based Milk Payment System (QBP), directly incentivizing farmers to increase production and improve milk quality parameters like butterfat content, which is crucial for butter and fat output.

Market growth faced a headwind in 2022 due to a severe drought and high levies on animal feeds, which pressured milk supplies. However, investments in processing capacity, such as the new plant at Bukura Farmers Agricultural College, and a strategic focus on exporting processed products like butter helped sustain the expansion. The competitive landscape intensified with the entry of new players, notably Uganda’s Pearl Dairy Farms acquiring local processors, which spurred further investment and activity in the sector.

By 2023, production volumes stabilized, but a significant shift toward higher-value products was evident, with processed butter and ghee output surging by 34.7%. This reflected increased domestic processing capacity and consumer interest in value-added dairy items. New KCC notably grew its market share, challenging the dominant position of Brookside Dairy, while the government continued to prioritize dairy as a key economic transformation value chain under its Bottom Up Economic Transformation Agenda (BETA).

Production butter, dairy spreads and milk fats in Kenya

In kind, 2017-2020, t

Top producers of butter, dairy spreads and milk fats, 2017-2020

World map of production of butter, dairy spreads and milk fats, 2017-2020

Kenya's production of butter, dairy spreads, and milk fats declined after two years of growth. In 2020, output remained virtually unchanged at 34 805 tonnes compared to 2019. Over the 2017-2020 period, production increased by 13.7%, with a compound annual growth rate of 4.4%. The peak was recorded in 2019 at 34 886 tonnes, while the largest annual increase occurred in 2018 at 7.3%.

Annual dynamics of production in Kenya in kind, 2017-2020, t

In value, 2017-2020, M $ US

Kenya's production of butter, dairy spreads, and milk fats increased for the second consecutive year. In 2020, the output was valued at 169.2 million US dollars, up 15.3% from 2019. Over the 2017-2020 period, production grew by 18.3%, with a compound annual growth rate of 5.8%. The lowest value was recorded in 2018 at 135.4 million US dollars, which also saw the largest decline of 5.3%.

Annual dynamics of production in Kenya in value, 2017-2020, M $ US

Exports butter, dairy spreads and milk fats from Kenya

Exports in kind, t

In 2020, Kenya's exports of butter, dairy spreads, and milk fats reached 62.7 tonnes, marking a sharp increase of 28.3% from the previous year. Over the 2017-2020 period, exports decreased by 41.6%, with a compound annual growth rate of -16.4%. The lowest volume was recorded in 2019 at 48.9 tonnes, while the peak was in 2018 at 135.2 tonnes. The largest decline occurred in 2019, falling by 63.8%.

Annual dynamics of product's exports from Kenya in kind, 2017-2020, t

From 2017 to 2020, the three largest markets for Kenya's exports in kind were Egypt, Tanzania, and Pakistan, which together accounted for 76.9% of total flows.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Kenya in kind, 2017-2020

Exports in value, K $ US

In 2020, Kenya's exports of butter, dairy spreads, and milk fats in value terms stood at 305 thousand US dollars, a steep increase of 48.4% compared to 2019. Over the 2017-2020 period, exports decreased by 39.3%, with a compound annual growth rate of -15.3%. The lowest value was recorded in 2019 at 206 thousand US dollars, while the peak was in 2018 at 558 thousand US dollars. The largest decline occurred in 2019, dropping by 63.1%.

Annual dynamics of product's exports from Kenya in value, 2017-2020, K $ US

From 2017 to 2020, Tanzania led Kenya's exports in value terms with 40.5%, followed by Egypt at 30.1%, and Pakistan at 9.8%. Together, these three markets represented 80.4% of total flows.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Kenya in value, 2017-2020

Imports butter, dairy spreads and milk fats to Kenya

Imports in kind, t

Kenya's imports of butter, dairy spreads, and milk fats declined for the third consecutive year. In 2020, imports totaled 300.2 tonnes, showing a modest decrease of 8.1% from the previous year. Over the 2017-2020 period, imports decreased by 56.9%, with a compound annual growth rate of -24.5%.

Annual dynamics of product's imports to Kenya in kind, 2017-2020, t

From 2017 to 2020, Uganda dominated Kenya's imports in kind, accounting for 85.2% of the total, with the remaining flows distributed among multiple smaller partners.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Kenya in kind, 2017-2020

Imports in value, K $ US

After two years of decline, Kenya's imports of butter, dairy spreads, and milk fats in value terms increased. In 2020, imports were valued at 1 810 thousand US dollars, marking a slight advance of 2.9% year-over-year. Between 2017 and 2020, imports decreased by 50.4%, equating to an annualized rate of -20.9%. The lowest value was recorded in 2019 at 1 759 thousand US dollars, while the largest decline occurred in 2018 at 33.5%.

Annual dynamics of product's imports to Kenya in value, 2017-2020, K $ US

From 2017 to 2020, Uganda concentrated most of Kenya's imports in value terms, taking 85.5% of total flows, with the rest fragmented among other smaller markets.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Kenya in value, 2017-2020