Global dairy trade is continuing its long-term expansion, but the structure of the market is changing as cheese emerges as the main growth driver, the United States and South American suppliers gain ground, and weaker Chinese demand redirects trade towards emerging markets, according to the World Dairy Map 2026 released by RaboResearch.
The report said global dairy trade has been growing at an average annual rate of around 2 per cent. Trade reached 101.2 billion kg in liquid milk equivalent terms in 2025, an increase of about 11 per cent from 91.1 billion kg in 2017.
The changing global trade landscape has significant implications for India, the world’s largest milk producer. While India has a dominant position in milk production, its participation in global dairy trade remains relatively limited compared with major export-oriented producers. The shift in international demand towards cheese, whey and other value-added dairy products could, however, create new opportunities for Indian processors and exporters.
According to the report, the European Union remains the world’s largest dairy-exporting region, with exports of 27.5 billion kg in liquid milk equivalent terms in 2025, excluding trade within the bloc. However, its share of the global market is gradually declining as the United States, Argentina and Uruguay expand their presence.
New Zealand remains the largest single-country dairy exporter, accounting for about 22 per cent of global dairy trade. The United States has strengthened its position significantly, with its share of global dairy exports rising from 11.3 per cent in 2017 to 13.5 per cent in 2025.
RaboResearch said the United States and Argentina are particularly well placed to drive future dairy supply growth, while Europe faces increasing constraints on milk production. Stronger supply growth in these countries is expected to intensify competition in international markets.
Cheese: Strongest Growth Segment
Cheese has become the strongest growth engine in global dairy trade, while milk powders are showing weaker momentum. Butter exports also recorded strong growth in 2025, driven largely by increased shipments from the United States, while whey is gaining importance amid rising demand for protein-rich products and applications.
The trend is relevant for India, where the dairy sector has traditionally been dominated by liquid milk and products such as ghee, curd and paneer. Rising urbanisation, changing food habits, the expansion of quick-service restaurants and increasing demand for high-protein foods could support greater investment in cheese, whey protein and other value-added products.
India produced 251 million tonnes of milk in 2024-25, up 71.6 per cent from 146.3 million tonnes in 2014-15, according to an APEDA dairy market dashboard. Despite its massive production base, the country remains largely domestically oriented, making value addition and export competitiveness important areas for future growth.
Weak Chinese Demand
China remains the world’s largest dairy importer, but declining purchases are forcing exporters to look for alternative markets. The report identified the Middle East, Southeast Asia and Brazil as important emerging destinations for dairy exporters.
This geographical shift could offer opportunities for Indian dairy exporters, particularly in nearby markets in the Middle East and Southeast Asia. India’s proximity to these markets can provide a logistical advantage, although exporters will have to compete with established suppliers from New Zealand, the European Union, the United States and Australia.
The report noted that limited domestic dairy production in several Middle Eastern countries, including Saudi Arabia, the United Arab Emirates and Oman, has increased their dependence on imports. However, geopolitical risks affecting shipping routes, particularly around the Strait of Hormuz, could disrupt future dairy trade flows.
Value Addition Holds the Key
India’s dairy sector has a production scale unmatched by any other country, but the changing structure of global dairy trade suggests that future export opportunities may increasingly lie in value-added products rather than bulk milk commodities.
The country’s large domestic market remains the main destination for its milk production. However, the global growth of cheese and whey markets could encourage Indian dairy companies and cooperatives to invest further in specialised processing, quality certification, cold-chain infrastructure and export-oriented product development.
India’s milk production has expanded rapidly over the past decade, providing a large raw material base for the processing industry. The challenge will be to convert this production strength into competitiveness in international markets without compromising domestic availability or farmer returns.