23 Oct - The world-wide growth in demand for dairy products is forecast to fall to 1.7% in 2008/09 from previous years' average annual growth of between 2-3%, analysts Rabobank have said.
A major factor in this decline will be the Chinese milk contamination scandal that has caused its domestic population to lose “confidence in its local supply”, said analyst Tim Hunt.
China, along with India, has played an important role in increasing world dairy demand, accounting for half the rise in global consumption in recent years as their growing middle classes find dairy products more affordable.
But since mid September, some 100,000 people have become sickened in China and four died after high levels of the industrial chemical melamine were discovered in a host of dairy products, including baby milk, yoghurt and confectionery.
Hunt estimates Chinese consumption of dairy products has fallen by 20% in the wakes of the crisis as consumer confidence has plummeted in domestic products.
Another factor is that UK consumption of cheese and milk is dropping while demand for yoghurt and cheese is falling across the European Union, said dairy expert Mark Voorbergen.
EU citizens are the world’s largest dairy consumers, with France and Holland topping demand. In each country per capita consumption of milk equivalents reaches 300 litres per year.