Research undertaken by Dairy Australia has shown that despite the rising price of dairy in the Middle East, demand among regular consumers remains strong.

Research undertaken by Dairy Australia has shown that despite the rising price of dairy in the Middle East, demand among regular consumers remains strong.

The survey has found that, with the exception of Egypt, demand for dairy in the oil-rich region is unlikely to be significantly impacted by price increases.

Dairy Australia Industry Analyst, Norman Repacholi, said while the Middle East may not currently be as directly important a region for Australian dairy exporters as our Asian markets, it is an increasingly significant market in global dairy trade.

“As dairy consumption in this region increases in the future, it is vital that we have a clear picture of developments and the probable impacts of sustained high dairy prices.

“In a number of these countries, prices have already increased in the range of 20 to 50%. This has lead to some consumer outcry and some attempts by Governments to control retail prices. However, the increases have been accepted on the basis that prices for all goods and services are increasing – and some by much more than dairy,” he said.

Mr Repacholi said while there is currently a favourable perception and market position of Australian dairy products, further expansion may be limited by availability of supply, distance and competition in countries that have better market access.

“The European Union (EU) ‘neighbourhood agreement’ with Egypt, for example, saw Egyptian buyers shift their preference away from Australia and New Zealand in favour of milk powders and butter from the EU, as EU sourced product was not subject to import tariffs of 10-20%,” he said.

Australia also faces a tariff disadvantage as a result of free trade arrangements between the EU and Jordan, Lebanon, Syria and North African countries.

“Geography and some unfavourable trade policy arrangements have reduced the extent to which the Middle East relies on Australia for dairy commodities, and discouraged our country achieving a similar market share compared to our Asian trading partners.

“However, the region is still a significant market for Australian dairy exporters – already accounting for 12.7% of the value of our dairy exports. Dairy export volumes have also increased by more than 20% between 2000 and 2006, and therefore seen as a priority for future market development,” he said.

“Dairy Australia will seek to assist local authorities make better, informed decisions concerning dairy market access and policies by providing general market information to key contacts in the Middle East,” said Mr Repacholi.

The survey, a follow up to Dairy Australia’s Asian Demand Analysis report released earlier this year, examined the sustainability of demand at current commodity prices in the United Arab Emirates, Iran, Oman, the Kingdom of Saudi Arabia and Egypt.

It was designed so that industry could better understand current demand responses to increased dairy commodity prices, potential dairy substitutes, and expectations of future demand, particularly against dairy substitutes.

For further information contact Katy Hetherington, Corporate Communications Advisor on 03 9694 3766 or 0407 322 995 or This email address is being protected from spam bots, you need Javascript enabled to view it