Thailand's Dairy Industry Overview

Positioned strategically in Southeast Asia, Thailand's dairy market is experiencing significant growth. It stands as the leading dairy exporter in the ASEAN region, making the dairy industry a vital component of the Thai economy.

Milk Production and Dairy Cattle

Thailand's dairy sector is supported by approximately 550,000 dairy cattle, contributing to an annual milk production of around 1.4 million tonnes. The sector is diversified by niche segments such as dairy goats, enhancing the variety within the industry.

Milk Processing and Dairy Production

The country processes about 1.2 million tonnes of milk annually. While the cheese industry is still developing, it achieves a production volume of approximately 5,000 tonnes each year. Additionally, Thailand produces around 15,000 tonnes of milk powder and whey, yet continues to import these products to meet domestic demand.

Key Enterprises and Farms

Prominent enterprises in Thailand's dairy industry include Thai Dairy Co., Ltd., Dutch Mill Co., Ltd., FrieslandCampina Thailand, and Maeil Dairies Thailand. Major contributors to milk production are Muaklek Dairy Farm and Charoen Pokphand (CP) Group farms.

Exports and Imports

Thailand exports about 20,000 tonnes of dairy products annually, primarily consisting of milk powder and UHT milk. Conversely, the country imports approximately 25,000 tonnes of dairy products each year, indicating a reliance on imported milk powder and whey to satisfy domestic consumption.

Significant Market Events

Key developments in the market include an 80% increase in U.S. dry whey exports, reflecting a trend towards premium dairy materials for industrial and consumer applications. Fonterra is enhancing its supply chain operations to strengthen its presence in the market. With an 11.5% growth in exports projected for 2024, Thailand remains ASEAN's chief dairy exporter, generating a revenue of $582 million. Nestlé's expansion of its Nescafé ready-to-drink cold coffee lineup exemplifies the growing diversification in Thailand’s dairy product offerings. International collaborations with partners from the UK, Germany, Portugal, Ecuador, and African nations further support the Thai dairy sector.

Trade Disputes and International Engagement

Currently, Thailand is engaged in a trade dispute with New Zealand concerning dairy sector obligations under a free trade agreement. Initially, Thailand's tariffs on dairy were to be reduced to zero, but the country has expressed a desire to renegotiate these terms. Fonterra aims to capture the adult nutrition market in Thailand by expanding its Anlene line to include collagen-infused yogurt, lactose-free milk, and revamped UHT packaging, targeting the aging and health-conscious population.

Policy Changes

Thailand has eliminated import tariffs on dairy products from New Zealand and Australia. Starting January 1, 2025, this policy change reduces the landed cost of imported dairy ingredients and enhances Thailand’s role as a regional dairy processing hub.

Market for South Australian Dairy Products

The Yoghurt Shop's products are now stocked in all 22 Foodland Supermarkets in Thailand, marking a major milestone for the brand. Tetra Pak expanded its global innovation network with new centers in Thailand.

Supply Disruptions

Farm Fresh is responding to supply disruptions caused by border tensions with Thailand by expanding its operations in Southeast Asia. Dairyworks' growth was driven by expansion into new markets, including Thailand, contributing to its revenue increase. Promotional efforts in Thailand are fostering growth, such as the 'Discover UK' campaign which featured seven British dairy brands across 22 Food Hall stores and two Tops Fine Food outlets.

Thai Dairy Farmers' Protest

Thai dairy farmers have marched to Government House in Bangkok, demanding a halt to milk powder imports and an extension of the school milk program. They submitted a formal petition to address the growing crisis in the agricultural sector due to an oversupply of raw milk.

Increase in Milk Powder Shipments

Milk powders recorded a significant increase in shipments to Thailand. Additionally, Nestlé's brands Milo, Nescau, and Nesquik will be official NBA partners in Thailand, marking one of the initial markets for Nestlé's partnership with the NBA. Thailand is one of the countries involved in the dairy trade mission. Delegates from Thailand participated in the AHDB-hosted mission to explore British dairy products.