Mikhail Mishchenko: The Dairy Market of Azerbaijan and Central Asia Is Growing, but Deficit-Prone

As Mikhail Mishchenko reminded at the beginning of his presentation, the combined population of Central Asian countries — including Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, and Azerbaijan — is approaching 100 million people. Demographic growth, particularly in Kazakhstan and Uzbekistan, is driving a sharp increase in demand for dairy products.

However, the region remains heavily import-dependent: a significant share of dairy products — from drinking milk to butter and whey — is imported from Russia, Belarus, Iran, Turkey, as well as India and Pakistan. Iranian dairy exports are growing especially rapidly, often entering through parallel channels, including grey imports.

An analysis of Azerbaijan's import structure over the past decade shows:

• Belarus and Russia maintain leading positions in milk and SMP (skimmed milk powder) supplies;

• Iran has significantly expanded its presence in butter and other categories, including fresh and fermented cheeses;

• Turkey actively promotes traditional cheeses and curd-based products.

According to Mishchenko, despite supply shortages, Azerbaijan is actively developing vertically integrated models — major processing plants are investing in their own farms. One example is the Azersun holding, which is currently building a second farm with 2,500 Jersey cows.

In Kazakhstan, dairy consumption is steadily rising, especially in the out-of-home sector. According to DairyNews estimates, per capita milk consumption has reached 265 kg per year — higher than official figures.

However, there are serious concerns about the accuracy of official production and livestock statistics. In 2024, the National Statistics Bureau drastically reduced its reported milk production figures by doubling down on revisions for household and small farm sectors — without adjusting the number of cows. As a result, official production data does not align with the actual market volume, complicating objective assessment of the supply deficit.

According to Mishchenko, Kazakhstan’s real dairy market amounts to around 5 million tons of milk annually, with no more than 1.3 million tons being commercially marketed. This creates significant pressure on processors, especially in the country’s southern regions — Almaty, Turkistan, Shymkent, and Astana.

He also cited FAO and IFCN data: global milk production now stands at nearly 1 billion tons, yet only around 500 million tons are commercially processed. In countries like India and Pakistan, only 40% of produced milk is processed, with the rest consumed locally.

Meanwhile, developed markets (EU, US, Australia) are experiencing a decline. The 2030 forecast indicates:

• EU: a reduction in milk output by 9 million tons;

• Asia (India, Pakistan): growth in processing and demand;

• Global cow population: expected to decline by 12 million head.

Thus, developing countries — including those in Central Asia — are becoming the new drivers of global dairy demand, despite internal production constraints, Mishchenko noted.

In addition to DairyNews.today's publisher, other dairy industry experts spoke at the conference. Irina Ivanova (IDS) compared the financial models of operating a dairy plant in B2B versus B2C formats, highlighting the EBITDA potential of professional channels. Yuri Vlasenko, a dairy industry marketer and co-founder of the marketing agency "Best Practices," gave a presentation on how dairy plants can adapt their production to meet the expectations of the new generation of consumers — Gen Z, who increasingly favor functional and creative breakfast solutions.

The DairyRally roadshow is more than just an informational event — it's an important platform for dialogue among farmers, processors, experts, and government representatives. Participants will gain firsthand insight into the real-world development of the dairy sector — from pasture to modern factories — engage with agricultural producers, and discuss opportunities for localization, modernization, and production expansion. This live interaction creates a unique opportunity to spotlight both the challenges and achievements of the sector, foster knowledge exchange, and shape an effective development model for Azerbaijan’s dairy industry.

Read the DairyRally Azerbaijan 2025 News