Chinese import freeze creates uncertainty in international markets
Arla follows with concern one of the group’s main markets in Southeast Asia, Bangladesh, as surplus from whole milk powder from New Zealand needs to find new markets.
China’s import stop for whole milk powder implies that the volume of imports was halved in the first half of 2023. This is now causing repercussions in a number of markets, where primarily New Zealand-based Fonterra is forced to find new sales channels to make up for the lost exports to China, which has constituted the main market for the major exporter. This information is provided by FødevareWatch (food industry news media).
Arla Foods also exports whole milk powder to several Asian countries, to include Bangladesh, where 170 million consumers have Arla Dano as their preferred brand.
- Our primary international markets for milk powder are Bangladesh and Nigeria. In Nigeria, Fonterra is not present, but in Bangladesh, the company is the supplier to the second largest brand. Here we predict that our growth will be slightly lower than previously estimated, Simon Stevens, VP, Arla Foods International, underscores to FødevareWatch. The Arla Foods International business encompasses the Middle East/North Africa, Southeast Asia, China, and West Africa regions. He also sees a weakening local currency as a challenge in Bangladesh. This is happening after two years in which Arla Foods has seen a volume growth of 20 percent relative to Arla Dano in Bangladesh.
Overall, Arla Foods continues to note great potential in Southeast Asia, which collectively accounts for a turnover of DKK 2 billion annually, according to FødevareWatch.