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Finding new demand as trade wars threaten sales 

16 August 2018 | Global Dairy Trade

Tariffs 

As the saying goes, a week can be a long time in politics. When politicians of two of the world’s economic powerhouses engage in a trade war, a week can seem like an eternity.  

As tariffs on dairy ingredients going into China rise, U.S. dairy companies may feel demand reduce from price-sensitive customers. The U.S. dairy industry’s momentum into China was under threat said Shawna Morris, VP of trade policy at the U.S. Dairy Export Council, recently. 

“U.S. dairy producers and businesses have worked hard to make advancements in China; we believe increased sales throughout Asia are key to our future success, and we are deeply worried that the current trade situation threatens to up-end the positive momentum not just this year but also in the years to come,” she said here.

To protect global sales volumes and revenues, U.S. exporters will need to be creative with how they expand their customer base abroad and make sure their approach can continue to adapt in an ever-changing marketplace.

Diversifying beyond traditional markets is the first step. It can also be a challenging one. Without teams on the ground, getting into unknown territories thousands of miles away is no easy feat. Even with the best sales team, it can take months or years to build relationships with new buyers and sustainable demand.

Dairy ingredient sellers could opt for an alternative approach. A global trading platform can be an effective entry point into an unknown market. Companies can use the platform to test new markets and build customer relationships without needing to put a shoe on the ground. 

GDT Events, for example, has over 500 registered bidders across 70 countries. This wide geographic reach helps to maximise the natural ebb and flow of demand as well as insure against trade disruptions. Over 70 per cent of registered buyers of whole milk powder, skim milk powder and butter are in countries outside of China. Over the last year, approximately 370,000 MT was sold through the platform to countries outside of China.

As a trusted and transparent platform providing market-based reference prices, GDT Events provides sellers with certainty in an increasingly uncertain marketplace. In times like these, having the ability to pivot and find new export customers is not only critical but possible.

 

For more information please contact:

Eric Hansen  /  Director, Global Dairy Trade

Contact Eric