Market evolution: Concentrated milk (CN 0402) — 2015–2025
Introduction
This report examines the trade dynamics of the European Union (EU) in concentrated milk products (CN code 0402) over the decade from 2015 to 2025. The analysis covers the evolution of export and import values, volumes, and prices, the structural changes in production and market specialization, and the sector's adjustment to volatility and external shocks. The EU has consistently maintained a large trade surplus in this product category, though the drivers of its export performance have shifted significantly over the period. For a complete product definition and trade overview, see the scope and definitions.
A Tale of Rising Values and Declining Volumes
The EU's trade in concentrated milk is characterized by a divergence between the value and volume of exports, pointing to a fundamental shift in market conditions and pricing.
The Export Surplus Grew in Value but Not in Volume
The EU maintained a significant and growing trade surplus throughout the period. While the balance in EUR increased by 4.5% from €3.14 billion in 2015 to €3.29 billion in 2025, the underlying drivers changed. Export value rose by 5.6% (to €3.52 billion) while exported quantity fell by 15.9% (to 1.26 million tonnes). This indicates that the higher export revenue was entirely driven by price increases rather than volume growth.
Prices Soared, Underpinned by Global Inflation
Average export prices increased by 25.6% over the period, reaching €2,785 per tonne in 2025. Import prices also rose sharply, by 22.3% to €1,927 per tonne. This price inflation was most pronounced between 2020 and 2022, reflecting global supply chain disruptions and input cost pressures. The following table summarizes the key trade aggregates.
| Metric | 2015 | 2025 | Change (%) |
|---|---|---|---|
| Export Value (EUR) | 3.33 billion | 3.52 billion | +5.6 |
| Export Quantity (Tonnes) | 1.50 million | 1.26 million | -15.9 |
| Export Price (EUR/t) | 2,217 | 2,785 | +25.6 |
| Import Value (EUR) | 188.5 million | 233.9 million | +24.1 |
| Import Quantity (Tonnes) | 119,608 | 121,379 | +1.5 |
| Trade Balance (EUR) | 3.14 billion | 3.29 billion | +4.5 |
Export Destinations Showed Stable Commitment but Divergent Growth
The top export partners by value demonstrated stable commitment to the EU market, with most relationships deepening over the decade. Algeria remained the largest single destination, growing by 8.2% to €336.7 million. Saudi Arabia (+39.7%) and Oman (+53.7%) showed the strongest growth among the top partners. Conversely, exports to China fell by 28.3%, and those to Nigeria contracted by 43.6%, indicating a reorientation of trade flows. The full list of top partners provides further detail.
Production Surge and Shifting Specialization
Behind the trade figures lies a story of massive growth in EU production and evolving competitive advantages among Member States.
Domestic Production Expanded Dramatically
EU production of CN 0402 products increased substantially. Production quantity more than doubled, growing by 138.6% to 3.52 billion kg. The increase in production value was even more striking, rising by 449.8% to €9.65 billion, highlighting the impact of price inflation on the sector's revenue.
Specialization Patterns Solidified Within the Bloc
The EU is not a monolithic exporter; competitive advantages are highly concentrated in a few Member States. Ireland holds the strongest revealed comparative advantage (RCA of 4.05), followed by Luxembourg and France. This specialization is reflected in export shares, where the Netherlands, Germany, and France remain the top three exporting members, albeit with varying growth trajectories. Belgium and Ireland notably increased their export shares.
Import Dependency Diversified Away from the UK
The Herfindahl-Hirschman Index (HHI) for import value concentration fell by 50.4%, from 8,128 to 4,028, indicating a significant diversification of import sources. While the United Kingdom remained the top supplier, its share declined by 20.7%. In contrast, imports from Ukraine surged by 8,124%, and those from New Zealand grew by 295.7%. This shift reduced the EU's reliance on any single partner for supplemental imports, as detailed in the concentration analysis.
Price Volatility, Shocks, and Increasing Export Dependence
The market experienced significant price volatility, particularly during the 2022 global inflation crisis, while structural indicators point to a deepening integration of the EU's dairy sector into global markets.
Price Shocks Peaked in 2022, Affecting Key Export Markets
The most severe price shocks were detected in 2022. Export prices to China exhibited an abnormality score of 101.1 (a shift of +39.3%), and prices to Yemen and the Dominican Republic also saw sharp, atypical increases. This coincides with the period of maximum global energy and logistics cost inflation. For import relationships, volatility (measured by the coefficient of variation) was highest for the United States (1.25) and Ukraine (1.19), reflecting more unpredictable supply flows.
The EU's Trade Intensity and Export Propensity Rose Sharply
Indicators of market openness and external dependency strengthened considerably. The trade intensity (total trade as a share of production) increased by 75.6% to 37.7%. More importantly, the export propensity (exports as a share of production) rose by 81.5% to 36.4%. This demonstrates that EU producers became significantly more reliant on foreign markets to absorb their increased output.
Net Export Reliance Intensified, Highlighting Sectoral Openness
The EU's net import reliance metric became more negative, moving from -22.4% to -52.3%. A negative value indicates a net exporter, and its deepening confirms that the concentrated milk sector is a major source of export revenue for the EU, with its surplus growing in proportion to its production base.
Conclusion
Over the 2015-2025 period, the EU's trade in concentrated milk (CN 0402) evolved through three key dynamics: a price-driven increase in trade value that masked a decline in physical export volumes; a substantial expansion of domestic production that altered the bloc's competitive landscape and sourcing patterns; and a deepening integration into global markets, characterized by increased vulnerability to price shocks and a greater reliance on exports. The sector's trade surplus remained robust, but its foundations shifted from volume growth to value growth, powered by inflation and a more specialized production base. This evolution underscores the sector's exposure to global market conditions and the strategic importance of diversified trade relationships within a more open and production-intensive EU dairy industry.