Export Summary

Over the past two decades Australian milk production has been well above that volume required for domestic consumption, so that a significant proportion is destined for export markets. In the past two years Australia exported around 45% of its milk production – the lowest proportion since the mid-1990s, due to the reduced availability of product for export.

While Australia accounts for an estimated 2% of the world’s milk production, it is a significant exporter of dairy products. Australia ranks fourth in terms of world dairy trade – with a 9% share – behind the European Union as a bloc, New Zealand and the US.

Japan is the single most important export market for Australia, accounting for 19% of exports by value. Australian exports are concentrated in Asia, which represented 71% of the total dairy export value of A$2.9 billion in 2008/09.

This concentration of exports in Asia/East Asia reflects both Australia’s geographic proximity to these markets and the extent to which Australia is excluded from other major markets by direct restrictions (as in the case of the European Union) or the impact of the export subsidy programs of major competitor countries.

Asian markets have considerable potential for consumption growth as incomes rise and diets become more ‘westernised’. Australian dairy companies have proven track records in supplying these markets over a number of decades. The Middle East and the Americas are also becoming increasingly important markets for many Australian exporters.

Australia’s top five export markets by volume in 2008/09 were Japan, Singapore, China, the Philippines and Malaysia; while the top five export markets by value were slightly different in Japan, China, Singapore, Indonesia and Malaysia. The fastest growing export market for Australia has been China, which has lifted from fifth in both the above rankings in the past year.