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Thai Milk and Dairy Exports Thrive in FTA Markets, Achieving Significant Growth

The Department of International Trade Negotiations has unveiled a remarkable surge in the exports of Thai milk and dairy products to Free Trade Agreement (FTA) markets. Over the past seven months, these exports have witnessed an impressive 8.3% increase, with FTA markets now accounting for a significant 94.1% of the total export volume. Notably, Thailand’s leading FTA market, ASEAN, has expanded by 6.9%, amounting to a value of $300 million. The prominent drivers behind this growth have been products such as UHT milk, yogurt, and soy milk with added dairy, all of which have gained immense popularity.

The Director-General of the Department of International Trade Negotiations disclosed that the department has been closely monitoring the export dynamics of Thai milk and dairy products. The results indicate an ongoing expansion, positioning Thailand as the leading exporter in ASEAN and the seventh-largest in the world. Over the course of seven months, from January to July 2023, Thailand’s global exports of milk and milk products reached a substantial value of $380.1 million, representing an impressive 8.2% growth compared to the same period in the previous year. Notably, exports to FTA markets accounted for $357.7 million, registering an 8.3% expansion and constituting a staggering 94.1% of all milk and dairy product exports. Among the FTA markets, significant growth was witnessed in ASEAN (6.9%), China (41.4%), Hong Kong (18.6%), Australia (21.8%), and India (137.6%).

Specific dairy product categories experienced substantial growth, including UHT ready-to-drink milk, sour milk, yogurt, soy milk with added dairy, and other beverages containing milk and whey.

These statistics underscore the high demand for utilizing FTA benefits for the export of dairy products, especially in the ASEAN market. The appeal of FTA benefits lies in the exemption of import taxes on all milk and milk products from Thailand. Over the past seven months, Thailand exported milk and milk products worth $308.1 million to ASEAN, marking a growth rate of 6.9% and constituting a remarkable 81% of all dairy product exports.

The Free Trade Agreements (FTAs) established by Thailand with 18 trading partners have played a pivotal role in supporting the continued expansion of the Thai dairy and milk product export industry. As of now, 14 FTA trading partners, including ASEAN, China, Australia, New Zealand, Chile, and Hong Kong, have abolished import tariffs on all milk and dairy products from Thailand. Only four countries, namely Japan, South Korea, India, and Peru, have maintained reduced import tariffs on specific dairy products from Thailand. For instance, Japan levies import duties on milk (21.3-25.5%), yogurt (21.3-29%), and cheese (22.4-40%). South Korea imposes tariffs on milk (26.8%), yogurt (28.8%), and cheese (36%), while India no longer imposes taxes on imported yoghurt and yogurt from Thailand but retains import tariffs on milk (20-60%). In addition, under the Regional Comprehensive Economic Partnership (RCEP) agreement, Japan has agreed to gradually eliminate import tariffs on milk beverages containing milk, culminating in zero tariffs by 2037.

The robust performance of Thai milk and dairy exports in FTA markets is a testament to the industry’s resilience and adaptability in harnessing trade agreements to drive growth. As Thailand continues to establish itself as a leading global dairy exporter, these figures serve as a testament to the nation’s ability to leverage international agreements for economic advantage.

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