New opportunities for South American dairy

Published 25 September 19

As of July 2019, South America has increased exports to China year on year, especially from Uruguay.

Uruguay dairy exports to China grew year on year in 2018 from 5.6k tonnes to 15.1k tonnes, although 2017 was an unusually low period of trade. Compared to the 5-year-average Uruguay exports to China are actually down 3% (-0.5k tonnes).

A recent trade agreement between Uruguay’s largest dairy exporter Conaprole and Chinese dairy firm Mengniu is likely to continue to boost this growth.

In July, China also made a new agreement to allow dairy imports from 24 dairy plants in Brazil. The agreement allows for imports of cheese, butter, powdered milk and condensed milk. Brazil is already the largest beef exporter to China, exporting 323k tonnes in 2018. Brazil has not exported dairy products to China in recent years, but this new market access could lead to a more significant trade partnership.

Argentina is a large global exporter of dairy products. Argentina exported 16.7k tonnes of dairy products to China during the first 7 months of 2019, with whey products accounting for 87% of this. There is capacity for Argentina to increase its exports if China’s demand for dairy products continues to grow.

Although dairy market access for South American nations has increased, their current market share is still very small. New Zealand continues to be the dominant exporter to China, accounting for 42% of China’s total dairy imports in 2018. It is also important to consider that China’s GDP is growing at a particularly slow rate which could limit their demand for dairy imports, and dampen any further South American growth.

Charlie Reeve