Market evolution: Skimmed milk powder (CN 04021019) — 2015–2025

Introduction

This report examines the trade dynamics of the European Union (EU) for skimmed milk powder (CN 04021019) between 2015 and 2025. The product, defined as milk and cream in solid forms with ≤1.5% fat content, unsweetened, and in bulk packaging (>2.5 kg), is a critical dairy commodity. Using annual trade data from the EU Trade Dashboard, the analysis identifies key trends in the EU's trade balance, partner markets, and structural market changes over the decade.

The EU's Strengthened Position as a Global Net Exporter

Over the 2015–2025 period, the EU solidified its role as a major global exporter of skimmed milk powder, marked by a growing trade surplus and robust production growth.

A Substantial and Growing Trade Surplus

The EU consistently maintained a significant trade surplus for this product. The surplus grew from €1.36 billion in 2015 to €1.87 billion in 2025, an increase of 37.6% General Overview. While exports by value (+40.6%) and quantity (+16.1%) grew, the rise in the surplus was also fueled by a sharp increase in import values, suggesting higher import prices or volumes.

Expansion and Divergence in EU Production

EU production capacity expanded significantly, with output quantity rising by 62.4% and production value soaring by 140.1% over the period Market Structure. This expansion, however, was not uniform across the bloc. Specialization analysis for 2025 reveals a stark divide: Ireland (RSCA: 0.78) and France (RSCA: 0.34) were highly specialized producers, whereas countries like Romania (RSCA: -0.91) and Slovakia (RSCA: -0.89) showed negligible specialization Market Structure.

Consolidation of the EU as a Global Supplier

The EU's export propensity (exports as a share of production) more than tripled from 15.0% in 2015 to 56.7% in 2025. Concurrently, the EU's net import reliance deepened significantly, moving from -9.3% to -116.2%, confirming its strong and growing status as a net exporter Autonomy & Vulnerability. This indicates that an increasing share of EU production was destined for global markets.

Shifting Geographies of Export Demand and Import Supply

The destination of EU exports and the origin of its imports evolved significantly, reflecting changing global demand and supply chain adjustments.

Diversification and Growth in Key Export Markets

The EU's top export partners remained in North Africa, the Middle East, and Southeast Asia. While Algeria and Egypt showed steady growth, the most dynamic markets were Saudi Arabia (+154.6% value growth) and Malaysia (+95.0%). The Philippines also saw strong growth (+75.8%). In contrast, exports to China fell by 22.9% over the period General Overview.

The Rise of Ukraine as a Primary Import Source

The most dramatic shift occurred on the import side. Ukraine transformed from a minor supplier in 2015 (€0.6 million) to the EU's second-largest import source by 2025 (€34.3 million), a staggering increase of 5,488% General Overview. The United Kingdom remained the largest supplier. Meanwhile, traditional suppliers like Israel and Iceland saw their import shares collapse (-98.0% and -99.5%, respectively).

Evolving Roles of EU Member States

Among EU members, Belgium and France consolidated their positions as the largest exporters, while the Netherlands and Ireland also showed strong growth. On the import side, France and Poland emerged as major internal recipients of intra-EU trade, with import values growing by 714.6% and 260,641% respectively, indicating significant changes in internal trade logistics and dairy processing patterns General Overview.

Price Dynamics, Market Shocks, and Enhanced Resilience

The period was characterized by notable price volatility, particularly a pronounced shock in 2022, against a backdrop of generally improving supply chain diversification for the EU.

The 2022 Global Price Shock and Its Impact

Analysis detected significant price shocks for EU exports in 2022, linked to global supply chain disruptions and energy cost inflation. Abnormal price increases were recorded for exports to Yemen (+47.1%), Singapore (+48.5%), and Saudi Arabia (+54.5%) Volatility & Shocks. This event underscores the product's sensitivity to global macro-economic shocks.

EU Price Stability Relative to International Partners

Despite the global shock, the EU's export prices exhibited lower volatility (as measured by the coefficient of variation) than many of its key import partners. For instance, the CV for EU exports to Algeria (0.21) and Egypt (0.15) was lower than the CV for imports from major suppliers like Ukraine (1.18) and the United States (1.30) Volatility & Shocks. This suggests the EU may have been somewhat insulated from the most extreme volatility.

Improved Supply Chain Diversification

The Herfindahl-Hirschman Index (HHI) for EU imports by value fell from 7,744 in 2015 to 4,789 in 2025, a 38.2% decrease General Overview. A lower HHI indicates less concentration and greater diversification in the sources of EU imports. This structural shift, particularly the rise of Ukraine alongside the UK, enhanced the resilience of the EU's supply base for this commodity.

Conclusion

The EU's market for skimmed milk powder (CN 04021019) between 2015 and 2025 demonstrates a story of consolidation and adaptation. The bloc significantly strengthened its position as a global net exporter, driven by expanding production and an increasingly outward-oriented industry. Export markets matured with growth in the Middle East and Southeast Asia, while import sourcing diversified substantially, most notably with the emergence of Ukraine. Despite experiencing significant global price shocks in 2022, the EU's trade structure—with its large surplus, diversified import sources, and lower price volatility—positions it as a resilient and dominant player in the international skimmed milk powder market.