Fonterra emphasizes the significance of India’s dairy market as the world’s largest producer, exploring opportunities for specialized proteins. Despite high tariffs, Fonterra eyes India’s growing dairy consumption, anticipating a potential need for imports in the future. While the Australia-India trade agreement has limitations, Fonterra’s strategic outlook remains focused on the evolving dairy ingredient market in India.
Justine Arroll, Fonterra’s GM for Trade Strategy & Stakeholder Affairs, recently returned from India as part of a New Zealand business delegation. In a conversation with Brian Kelly on The Country Sport Breakfast, she discussed why India holds such importance for Fonterra and the opportunities it offers.
India: A Key Player in Global Dairy Production
Arroll highlighted India’s status as the world’s largest dairy producer, accounting for approximately 23% of global milk production, in stark contrast to New Zealand’s 2-3% share. This fact underscores the vital role India plays in the global dairy landscape.
Unlocking Opportunities in India
While New Zealand’s dairy exports to India remain relatively modest, at around 7,000 metric tonnes, Fonterra views India as a crucial market for its ingredients business. The company supplies specialized advanced proteins not locally produced in India but vital components in various food applications. For instance, Fonterra’s WPC80 is a versatile egg substitute in baked goods.
India-Australia Trade Agreement: Exploring Possibilities
Kelly inquired about Fonterra’s dairy products made in Australia and their potential under the recently signed Australia-India Economic Cooperation and Trade Agreement. Arroll explained that while the agreement primarily excludes core dairy products, with a few exceptions like infant formula, Fonterra’s Australian division is actively assessing opportunities within this framework.
Future Strategy in India
Arroll emphasized India’s significant, growing, and increasingly sophisticated dairy-consuming population. However, the country’s high tariffs, ranging from 30% to 60%, limit dairy imports from all sources. Despite being the world’s leading dairy producer, India’s dairy consumption is projected to outstrip its supply, potentially necessitating imports to meet the surging demand.
Fonterra’s Forward Outlook
Fonterra acknowledges the long-term importance of a comprehensive trade agreement between New Zealand and India that benefits all sectors and enhances dairy market access. While such an agreement may not be imminent, Fonterra remains committed to providing specialized dairy ingredients that cater to India’s evolving dairy industry, solidifying its role in India’s thriving dairy ingredient market.
Listen to the podcast:
source: https://bit.ly/3sPSlLT
