Milk powder with fat content of ≤1.5% market in Southern Asia

Earlier Report Observations

The market volume for milk powder in Southern Asia expanded from 406 thousand tons in 2018 to 682 thousand tons in 2023, a 68% increase over the period. This growth was driven by the entry of new private players, such as Dodla and Hatsun, which increased processing capacity, and rising demand for value-added dairy products like cheese and ice cream that use milk powder as an ingredient. Regulatory updates, including the revised FSSAI standards for milk and milk products implemented in July 2018, helped standardize quality and labeling requirements.

After a stable 2020 and a slight contraction in 2021 to 404 thousand tons, the market surged by 42% in 2022, reaching 574 thousand tons. This jump coincided with a consumer shift toward premium and natural ingredient-based dairy products, with 35% of consumers willing to pay more for organic options, boosting demand for milk powder. Private equity funding enabled new entrants like Hangyo to expand into premium segments. In 2023, growth continued at a slower pace of 19%, supported by major capacity investments, such as Mother Dairy's announcement of two new processing plants, and a sharp drop in skimmed milk powder prices from Rs 350/kg to Rs 210/kg, making it more affordable for processors.

Throughout the period, export fluctuations significantly affected net market volume, with a sharp drop in exports in 2019 followed by a recovery. Imports steadily declined from 129 thousand tons in 2018 to 71 thousand tons in 2023, reflecting increased domestic production. By 2024, ongoing FSSAI amendments to milk powder standards and a government focus on strengthening dairy infrastructure continued to shape the sector's evolution.

Production milk powder with fat content of ≤1.5% in Southern Asia

In kind, 2017-2020, K t

Top producers of milk powder with fat content of ≤1.5%, 2017-2020

World map of production of milk powder with fat content of ≤1.5%, 2017-2020

Production of milk powder with a fat content of ≤1.5% in Southern Asia has increased for the third consecutive year. In 2020, Southern Asia produced 364.1 thousand tons of this milk powder, marking a 16.2% increase compared to 2019. Between 2017 and 2020, production grew by 27.3%, which translates to an annualized growth rate of 8.4%.

Annual dynamics of production in Southern Asia in kind, 2017-2020, K t

Exports milk powder with fat content of ≤1.5% from Southern Asia

Exports in kind, K t

The data reveals irregular changes, indicating a volatile market environment. Exports reached their lowest point in 2019 at 1.9 thousand tons, with the largest decline recorded that year at 89.5%. In 2020, exports of milk powder with a fat content of ≤1.5% from Southern Asia stood at 24.9 thousand tons, representing a significant increase of 1 196.9% compared to 2019. From the high in 2017 to the low in 2019, exports varied by an 18-fold difference.

Annual dynamics of product's exports from Southern Asia in kind, 2017-2020, K t

Analysis of exports in kind from 2017 to 2020 shows a broad distribution across many markets. Iraq accounted for 29.2% of exports in kind, Syria for 13.4%, and Russia for 5.3%. Together, these three countries represented only 47.9% of total flows, with a significant 52.1% going to other partners.

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

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

Exports in value, M $ US

The market showed signs of volatility over the observed period. Exports reached their lowest value in 2019 at 12.5 million US dollars, with the largest decline recorded that year at 77.2%. In 2020, Southern Asia's export volume of milk powder with a fat content of ≤1.5% came to 60.8 million US dollars, which is 385.8% greater compared to the previous year. The highest exports stood at in 2017, reflecting an 8.4-fold gap with the 2019 low.

Annual dynamics of product's exports from Southern Asia in value, 2017-2020, M $ US

From 2017 to 2020, Iraq accounted for 30.9% of exports in value terms, Syria for 19.1%, and Russia for 3.4%. Together, these three countries represented 53.5% of total exports in value terms, remaining the main destinations for milk powder with a fat content of ≤1.5% from Southern Asia.

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

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

Imports milk powder with fat content of ≤1.5% to Southern Asia

Imports in kind, K t

Imports of foreign milk powder with a fat content of ≤1.5% into Southern Asia declined for the third consecutive year. In 2020, imports stood at 86.0 thousand tons, indicating a sudden decrease of 27.0% year-over-year. Between 2017 and 2020, imports decreased by 34.1%, equating to an annualized decline rate of 13.0%.

Annual dynamics of product's imports to Southern Asia in kind, 2017-2020, K t

From 2017 to 2020, the United States accounted for 15.9% of imports in kind, New Zealand for 10.3%, and Ireland for 7.1%. These were among the largest suppliers of milk powder with a fat content of ≤1.5% to Southern Asia, but even together they represented just 33.3% of total imports in kind, indicating a broadly diversified partner base.

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

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

Imports in value, M $ US

Cross-border shipments of milk powder with a fat content of ≤1.5% into Southern Asia declined for the third consecutive year. In 2020, imports were recorded at 226.8 million US dollars, which is 14.7% lower versus the previous year. Over the period from 2017 to 2020, imports decreased by 31.9%, with a compound annual growth rate (CAGR) of -12.0%.

Annual dynamics of product's imports to Southern Asia in value, 2017-2020, M $ US

From 2017 to 2020, the United States accounted for 16.9% of imports in value terms, New Zealand for 11.2%, and Turkey for 6.4%. Their role as suppliers of milk powder with a fat content of ≤1.5% to Southern Asia was notable but not dominant, as their joint share reached only 34.5% of total imports in value terms.

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

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