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The Thai dairy sector under liberalised trade conditions


The Thai dairy sector under liberalised trade conditions
Special report
27 September 2004

THE MAIN OBJECTIVE of this report was the analysis of the likely impacts of an FTA between Thailand and New Zealand. Nevertheless, for the title of this report we used the phrase “The Thai dairy sector under liberalised trade conditions” because, with or without FTAs, the Thai sector will become subject to growing international competition.

Table of contents

Executive summary

1. Introduction

2. The international environment

2.1. Global dairy trade
2.2. Price formation of dairy commodities
2.3. Global trade policy
2.4. Ambitions of the major dairy exporters
2.5. Outlook for global markets

3 The Thai dairy sector

3.1. Structure of the Thai dairy chain
3.1.1. Dairy farming
3.1.2. Milk collection
3.1.3. Processing
3.1.4. Retail and foodservice
3.2. Dependence on imports
3.3. Competitive strength in the upstream part of the Thai dairy chain
3.3.1. Competitive strength of dairy farming
3.3.2. Competitive strength of milk collection co-operatives

4 Impacts of a liberalised trade environment on the Thai dairy industry

4.1. Competition between raw milk and imported dairy ingredients
4.2. Processor arguments in choosing between local sourcing and imports
4.3. Quantitative assessment of the impact of liberalised trade conditions

5 Options to mitigate the negative impacts of liberalisation

5.1. Opportunities to improve the competitive position of Thai dairy
5.1.1. Options for improvement in dairy farming
5.1.2. Options for improvement in milk collection
5.2. Options for government guidance to mitigate effects
5.3. Opportunities for new business

6 Conclusions and recommendations