Regional Office for Asia and the Pacific

Future demand for dairy products in Asia expected to soar – sustainability and shared growth with smallholder producers vital

Future demand for dairy products in Asia expected to soar – sustainability and shared growth with smallholder producers vital

Bangkok, Thailand, 21 May 2014 -- Soaring demand for milk and dairy products will be driven by an insatiable Asian thirst and appetite for decades to come, delegates at an FAO-sponsored regional meeting on dairy production heard today.

While that is a positive trend, there are challenges to ensure demand is met in a sustainable way and that smallholder producers also profit from increased production, the FAO said today.

Public and private sector experts from the world’s livestock and dairy sector have gathered in Bangkok 21 – 23 May 2014 to discuss the dramatic increase in Asian demand for dairy products in recent years and examine ways to manage its growth sustainably in the years ahead.

The three-day Dairy Asia meeting is convened and organized by the FAO Regional Office for Asia and the Pacific.

Asia has emerged as a major player in global dairy production and consumption. Aggregate consumption gains in dairy products in Asia over the past decade have exceeded twice the annual global average.

“OECD-FAO outlook estimates that Asian milk demand will touch almost 320 million tonnes by 2020 and that means the region will need to increase milk availability by another 40 million tonnes during the next six years” said Hiroyuki Konuma, FAO Assistant Director-General and Regional Representative for Asia and the Pacific.

The increased demand “provides a perfect opportunity for public and private investment in milk production and processing while at the same time contributing to household level food security and nutrition,” Konuma told delegates during the opening session of the meeting.

The Dairy Asia meeting, the first regional gathering of its kind to address the issue of the dramatic increase in demand for dairy products, was also faced with the critical importance of meeting the increased demand in Asia, as two thirds of the world’s 842 million undernourished people live in this region.

“Today we face the challenge of feeding more people than at any point in history,” said Konuma. That challenge will grow exponentially in coming years with an expected population growth to more than nine billion by 2050, up from some seven billion inhabitants, he added.

At an aggregate level, by 2020 the world will consume 60 billion litres more milk than in 2012 and more than half of this increase will be in Asia. Sustainable growth of this important industry is therefore vital to meeting increased nutritional demands.

However, this growth in demand is happening at a time when concerns about resource scarcity, growing pressure on feed resources, climate change and the need for more equitable development are becoming more and more important.

The industry will need to utilize more appropriate production technologies and obtain control along the dairy value chain in a manner that facilitates integration of environmental health, economic profitability and social and economic equity goals. Investment to ensure a sustainable dairy production is vital. But while most of the investment, and the industry’s potential economic growth, would likely come from larger operators, smallholders must also benefit from this opportunity.

“Considering nearly 80 percent of the milk in the region is produced by smallholders, improving their organization to give them better bargaining power in the market place must remain a core element of our work in future,” said Konuma. “While we recognize that bulk of investment will come from the private sector, we should work towards creating synergies and guiding investment in a manner that it does not marginalize smallholder producers,” he said, adding that women working in the industry in agrarian communities must also benefit. 

The meeting heard that it is also important to raise consumer awareness about the nutritional virtues of milk and that can happen by bringing science-based evidence about nutritional effects of milk and linking it with policy and regulation. The 1st of June is a good opportunity to do that, Konuma pointed out, as the meeting’s host country, among many others, observes the 1st of June as World Milk Day.