The trade in dairy products has suffered a number of massive blows in the last three years. The Russian trade embargo, the slowing of demand growth from China, the impact of low oil prices on demand from oil exporting countries and the strengthening of the US dollar have all had an impact on the demand for imports. The expansion of production surrounding the removal of production quotas in Europe added to the pain and resulted in a period of extremely low world prices.
Looking forward, none of these issues has been resolved. The Russian ban will be in place at least until 2017. Demand from China will continue to grow but at a slower rate, oil prices are forecast to remain at around the USD 50 per barrel mark, and the dollar is forecast to maintain its high value against other currencies. As a result, dairy trade is likely to grow at a slower rate than in recent years, driven more by population growth than per capita consumption increases.