News - May 16, 2013

'Demand for milk set to grow much faster'

The Chinese are buying up powdered milk in Dutch supermarkets because the people in China no longer trust the domestically produced powdered milk. That is the consequence of the melamine scandal in which children were poisoned by adulterated milk.

'It's not an easy situation to resolve,' says Professor Toon van Hooijdonk, who holds an endowed chair in Dairy Science. 'It will take a few years before China has decent infrastructure and quality control in the dairy market.'
If the entire dairy sector is shaky, why are the Chinese only focusing on powdered milk?  
'It's to do with baby milk powder. It's a standard product but parents are prepared to do anything for their children's health. Plus Chinese manufacturers are reluctant to enter that market. A food company responsible for the food poisoning of babies runs a big risk with its reputation. That can lead to companies going bust - there are several examples of that.'
Can't the international dairy market satisfy the extra demand from China?
'Dairy producers are already finding it difficult to keep up with the growing global demand for dairy products. The FAO is predicting that demand for milk will increase by 50 percent by 2050. Production growth will mainly be in emerging economies such as China, India, Thailand and Brazil. Dutch dairy farmers can produce an extra one to two million tons of milk when the milk quota ends. But the global demand for milk is set to rise by 300 million tons over the coming decades.'
Should Western dairy companies like FrieslandCampina invest in China to satisfy the demand for safe baby milk?
'They already do. They take over local companies or set up partnerships, not just in China but also in countries such as Thailand, Vietnam, Indonesia and African countries - the places where dairy consumption is rising. They don't just invest in the market but also in quality control and dairy farmers. That is essential; if the dairy companies don't invest in the farmers, in the long run it will be difficult for them to build up a position in the markets of these emerging economies.'