Market evolution: Whole milk powder (CN 040221) — 2015–2025

Introduction

This report examines the evolution of European Union trade in whole milk powder (WMP) — classified under CN 040221, "Milk and cream in solid forms, of a fat content by weight of > 1·5%, unsweetened" — over the period 2015–2025. The code bundles four sub-headings that span retail and bulk pack sizes as well as two fat-content thresholds (≤ 27 % and > 27 %). Together, they cover both whole-milk powder destined for consumer retail shelves and bulk industrial WMP used by food manufacturers.

Over the eleven years under review, the EU's WMP trade underwent a fundamental transformation. Export volumes fell by more than half, yet unit values climbed steeply — especially after 2021 — partially cushioning the revenue decline. Major destination markets were reshuffled: traditional outlets in North Africa gave way to Gulf and Asian buyers. Within the bloc, production held steady in physical terms but shifted in value, and the Union's overall export orientation weakened meaningfully. The sections that follow unpack these dynamics in detail.

1. The Price–Volume Divergence: Halved Exports, Higher Returns

The most striking feature of the 2015–2025 period is the sharp divergence between traded volumes and unit prices. EU exporters shipped progressively fewer tonnes onto the world market, yet earned substantially more per tonne — a pattern driven by a combination of global dairy price cycles, input-cost inflation, and a structural pivot toward higher-value product mixes.

1.1 EU export volumes fell by more than half while unit prices rose by 58 %

Between 2015 and 2025, EU extra-EU exports of WMP contracted from 350,300 t to 171,014 t — a decline of 51·2 %. The volume trajectory was not linear: exports peaked at 387,925 t in 2017, dipped during the 2018–19 period, partially recovered in 2020 (333,024 t), and then entered a sustained decline through 2025. Over the same period, the average export price rose from €3,032/t to €4,774/t (+ 57·5 %). The sharpest one-year price jump occurred in 2022, when the average reached €4,906/t — the highest of the entire window — coinciding with global energy and commodity price spikes. As a result, total export value fell by only 23·1 % (from €1,062 million to €816 million), far less than the volume decline would suggest.

Source: General Overview — Trade. Values rounded to the nearest integer; quantities and prices derived from sub-heading totals in the product-segment data.

The 2022 price spike deserves particular attention. Detected supply-shock events centred on that year show abnormal price surges for EU exports to Kuwait (abnormality score of 630, shift of + 51·9 %), Mauritania (+ 55·8 %), and Angola (+ 39·6 %). These events are consistent with the broader global dairy-price rally that followed the post-COVID recovery and the energy-cost shock triggered by the Russia–Ukraine conflict.

1.2 Import volumes declined even more steeply, though from a much smaller base

EU imports of WMP are roughly one-fifth the size of exports in value terms, and they followed a broadly similar volume-down / price-up pattern — but with greater volatility. Import volumes peaked at 40,377 t in 2016 and then collapsed to a low of just 10,154 t in 2021, before partially recovering to 17,400 t in 2025 (still − 54·2 % versus 2015). Import values hit a trough of €33·3 million in 2021 — less than half their 2015 level — and ended 2025 at €71·2 million. The import price rose from €2,357/t to €4,093/t (+ 73·7 %), a steeper rate of increase than on the export side, which narrowed the EU's historical price advantage.

Source: General Overview — Trade.

1.3 The trade surplus narrowed by €228 million but the EU remains a decisive net exporter

The EU has been a consistent net exporter of WMP throughout the period, with the trade balance ranging from €1,206 million (2017, the peak) to €745 million (2025). The surplus has been narrowing since 2022, falling from €1,025 million to €745 million in just three years. The net import reliance ratio — negative when the EU is a net exporter — moved from − 94·9 % in 2015 to − 37·6 % in 2025, confirming that the export surplus relative to domestic production has diminished substantially.

2. Geographic Reorientation: From the Maghreb to the Gulf and East Asia

Behind the aggregate volume and price trends lies a dramatic re-shuffling of the EU's trading partners. Several long-standing export markets in North and West Africa collapsed, while buyers in the Persian Gulf and East Asia gained share. On the import side, Brexit and the rise of New Zealand re-drew the EU's sourcing map.

2.1 Algeria and Nigeria collapsed as export destinations, shedding over €150 million combined

In 2015, Algeria and Nigeria were the EU's second- and fourth-largest WMP export markets, worth €88·2 million and €77·9 million respectively. By 2025, Algerian exports had collapsed to €8·9 million (− 89·9 %) and Nigerian exports to €8·6 million (− 88·9 %). Combined, the two markets shed approximately €149 million in value. These declines reflect a mixture of factors: the rise of local dairy processing capacity in both countries, tightening foreign-exchange constraints (especially in Nigeria), and the EU's own reduced availability of exportable surpluses.

2.2 Oman, Kuwait, and China absorbed the slack, with combined exports exceeding €340 million in 2025

The void left by North Africa was partly filled by buyers in the Gulf Cooperation Council (GCC) states and East Asia:

Source: Partners — Exports.

Oman was already the EU's top WMP client in 2015 and grew further, while Kuwait and China roughly doubled their purchases. China's trajectory is notable: after growing to a peak of €124 million (in a year not specified but inferred from the max), it settled back to €62 million in 2025, reflecting the post-2020 slowdown in Chinese dairy imports. The United Kingdom, despite Brexit, became a significantly larger customer — a trend likely linked to the redirection of supply chains and the UK's own production shortfalls.

On the import side, the concentration index (HHI) for import value fell from 8,027 to 4,390 (− 45·3 %), indicating that the EU's import sources became markedly less concentrated — more diversified — over the period. Export-side HHI, by contrast, rose from 460 to 816 (+ 77·3 %), suggesting that export destinations became somewhat more concentrated around a smaller number of large buyers.

2.3 Import sources diversified sharply as New Zealand replaced a post-Brexit United Kingdom

The United Kingdom was the EU's dominant source of WMP imports in 2015 at €79·7 million — nearly 89 % of total import value. By 2025, UK-sourced imports had fallen to €31·5 million (− 60·5 %), a decline that accelerated sharply after Brexit took full effect in 2021. New Zealand stepped in as the principal alternative supplier, surging from just €8·9 million in 2015 to €35·0 million in 2025 (+ 295 %). Ukraine also emerged as a new source, rising from virtually zero to €2·7 million — a modest figure, but one that reflects the EU's broader efforts to integrate Ukrainian agricultural exports, even in the dairy segment.

Source: Partners — Imports.

3. Stable Production but a Weakening Export Orientation

The final piece of the puzzle concerns what happened inside the EU. Domestic WMP production barely changed in physical terms, yet its value grew sharply — suggesting a shift toward higher-value product segments or simply reflecting the global price upswing. Meanwhile, the bloc's propensity to export WMP declined to its lowest level in the decade, and the internal geography of production became more concentrated.

3.1 EU domestic production held nearly steady in volume while its value surged by 46 %

EU production of WMP stood at 887,149 t in 2015 and at 856,577 t in 2025, a decline of just 3·4 %. Over the same period, the production value rose from €2,169 million to €3,157 million (+ 45·5 %). The minimum production volume was 566,904 t (in a year around 2020–21), likely reflecting pandemic-related disruptions or temporary shifts in milk allocation toward fresh dairy products. The stability of physical output, set against the halving of export volumes, implies that a growing share of EU-produced WMP was absorbed domestically — whether by the food-manufacturing sector, by stock-building, or by reclassification into other dairy product lines.

3.2 The Netherlands consolidated its anchor role, while Belgium and Denmark lost ground

The EU-internal geography of WMP exports shifted considerably between 2015 and 2025:

Source: Reporters — Exports.

The Netherlands remained by far the largest exporter, accounting for 37 % of EU WMP exports in 2025. However, the biggest proportional winners were Germany (+ 34·1 %) and Sweden (+ 12·1 %), both of which increased their absolute value despite the overall market contraction. The most dramatic declines hit Belgium (− 53·6 %) and Denmark (− 46·8 %). Specialisation indices (RSCA) for 2025 confirm that Ireland (RSCA 0·36), Belgium (0·33), and the Netherlands (0·29) are the most specialised WMP exporters within the EU, while the Baltic states, Malta, Slovenia, and Hungary show virtually no specialisation in this product.

On the import side, Belgium (€29·8 M) and the Netherlands (€26·5 M) continued to dominate EU import flows in 2025, though both declined from their 2015 levels. Italy (+ 254·8 %) and Poland (from near-zero to €2·9 M) showed notable growth as importers, potentially reflecting rising domestic demand for WMP as an industrial food ingredient.

3.3 Export propensity and trade intensity both fell to their lowest levels in the decade

The most telling structural indicator is the decline in the EU's export propensity — the ratio of exports to production — from 52·5 % in 2015 to 29·2 % in 2025 (− 44·4 %). Trade intensity (total trade relative to production) fell from 54·2 % to 30·4 % (− 43·8 %). In other words, whereas in 2015 more than half of every kilogramme of EU-produced WMP was destined for export, by 2025 the share had fallen to less than a third. This does not signal autarky — the EU is still a net exporter — but it does indicate a structural inward shift in the destination of EU WMP output.

From a vulnerability standpoint, this shift is largely positive: a lower export orientation reduces the EU's exposure to third-country demand shocks and currency fluctuations. However, it also means that EU WMP producers have become more dependent on intra-EU and domestic demand, which carries its own cyclical risks.

Conclusion

The EU's whole milk powder market over 2015–2025 tells a story of profound structural adjustment beneath superficially stable headline numbers. EU production barely changed in volume, yet the trade picture was transformed: exports halved, unit prices surged, and the geographic footprint of EU WMP trade pivoted decisively from North Africa toward the Persian Gulf and East Asia.

Three key takeaways emerge:

1. The price–volume divergence is the defining feature of the period. Export volumes fell 51 %, but a 58 % rise in unit prices limited the revenue decline to 23 %. The 2022 global commodity-price spike amplified this effect, producing the highest annual average export price (€4,906/t) and triggering detectable price shocks in several smaller destination markets.

2. Export markets were radically reshuffled. Algeria and Nigeria, worth a combined €166 million in 2015, collapsed to €18 million by 2025. Oman, Kuwait, China, and the United Kingdom more than compensated in aggregate. The post-Brexit reconfiguration also transformed import sourcing: the UK lost its dominant position, and New Zealand emerged as the EU's primary external supplier.

3. The EU is becoming less export-oriented for this product. Export propensity fell from 52 % to 29 % of production, and the trade surplus narrowed by €228 million. Domestic absorption of EU-produced WMP has grown, and the internal geography of production has concentrated further around the Netherlands, Germany, and Sweden — while Belgium and Denmark have receded sharply.

Looking ahead, the continued decline in export volumes — reaching a decade low of 171,014 t in 2025 — warrants monitoring. Whether this reflects a permanent structural shift toward domestic utilisation or a cyclical trough that will reverse remains to be seen. The sustained elevation of unit prices above €4,000/t suggests that cost pressures and global supply tightness continue to support the EU's WMP trade, even as its physical scale contracts.