MARKET ASSESSMENT OF DAIRY INDUSTRY IN TANZANIA

Transcription

1 MARKET ASSESSMENT OF DAIRY INDUSTRY IN TANZANIA S F O A P I N C E P T I O N W O R K S H O P 1 3 TH J A N U A R Y, , B L U E P E A R L H O T E L, U B U N G O P L A Z A ; D A R E S S A LAAM. P R E S E N T E D B Y M B WA M B O, N. R. ( P R I N C I P A L L I V E S T O C K O F F I C E R ) M I N I S T R Y O F L I V E S T O C K A N D F I S H E R I E S D E V E L O P M E N T.

2 Contents List 1.0 Introduction and Background Information 1.1 Dairy Industry 1.2 Dairy Value Chain Analysis 2.0 Milk Marketing, Processing and Consumption 2.1 Market Information 2.2 Milk Marketing 2.3 Milk Processing 2.4 Import and Export 2.5 Milk consumption 3.0 Conclusion and remarks

3 1.0 Introduction and Background Information Dairy Industry Cattle population in Tz is 22.8 mil, of which 780,000 are dairy cattle It is envisaged that, out of the 4.9 mil agricultural households, 1.7 mil keep livestock, of which 218,418 keep dairy cattle Livestock industry contributes about 4.7% to the Real Gross Domestic Product (GDP) Of this GDP, 40% comes from beef, 30% from dairy and the remaining 30% from other livestock commodities Thus, a Dairy cattle produces 2000 lts while the indigenous offers 400 lts per lactation.

4 1. 1 cont. Dairy and GDP Commodity % GDP Commodity % GDP Agriculture 20.7 % Contribution to GDP Beef 40 Livestock 4.6 Dairy 30 Other sectors 74.7 Other Livestock 30 Total: 100 Agricultur e 21% Livestock 4% Total: 100 % of Livestock GDP Other Livestock Beef 30% 40% Other sectors 75% Dairy 30% Livestock = 4.7 % of GDP, and Dairy makes up 30% of this

5 Dairy Industry Cont Milk production 2.0 bil. liters (MLFD, 2013/2014) 70% comes from the traditional herd and 30% from improved cattle Further, supply of dairy heifers is about 10,000 heifers per annum, while the demand is about 50,000 heifers That is, only 10% of milk produced annually is marketed Indicates: A large proportion of milk is consumed at home or wasted in the rural, milk producing areas. This shows that the potential for increasing milk supply from rural areas exists.

6 1.2 Dairy Value Chain Analysis Dairy value chain analysis include understanding a mutual link amongst stakeholders on input supply, production, processing, trading and consumption of value added o/p. Thus, the main concern on the dairy industry structure, is on the adjustment of milk volume marketed through formal and informal channel for ample processing. Tanzania has installed an annual milk processing capacity of 403,000 litres per day (lpd). The milk processed is estimated to be 139,800 lpd or 51.0 million litres a year.

7 Dairy Value Chain Cont. On the overall, in 2014 processing plants operated at about 35 % of their capacity Formal marketing include non-processed but tested and sold in hygienically, sanitary approved and sound environment The formal channel accounts for about 2.9% of processed Milk domestically

8 An Overview of the Structure of the Milk Sector In million lts Percent Total milk available 2, % From imports % Total domestic production 1, % From traditional cattle 1, % From improved breeds % On the farm consumption % Available raw milk for marketing 1,415 71% Formally traded milk % Informally marketed from domestic production 1, % Installed capacity for processing % Milk processed domestically % By large processors % By small processors %

9 Seasonal Availability of Milk Milk availability varies seasonally, low in dry, and this adversely affects the MCC and processors

10 2.1 Milk Marketing Bulk of milk is marketed through traditional (informal) channels, through hawkers. The MLFD estimate that of the dairy value chain = 68.1% is traded by hawkers, and direct home consumption and some is wasted = 28.5%. The waste includes over feeding calves, excess use above requirement, etc 10% of milk is traded formally of which very little, 2.9% (MLFD, 2012) enters the formal market for further processing through Milk Collection Centers (MCC) and large scale processors.

11 2.2 Market information In a survey of farmers 2012, noted only 52% surveyed actually knew the market price for milk in their region, and that less than 39% knew that different buyers offered different prices. This implies that 48% of farmers were naïve to market prices, they had no idea of a fair market value, and could be held captive by unscrupulous buyers. Sales of to local traders in the informal sector, yields better farm gate prices and therefore more profit vs sales to MCC. This could be one of the factor why so little enters the formal sector!

12 Milk Traded (Liters Million) Trends in Milk Marketing: Year (Million liters of milk) Traditional Market Farm Consumption Formal Market Trends in Milk Marketing Traditional Market Farm Consumption Formal Market Year

13 2.3 Milk Processing Of the 2.9 % of milk that enters the formal channels, MLFD (2014) lists 74 milk processing plants ranging from 500 to 50,000 liters/day. In a survey of 2012 noted that their distribution by capacity is concentrated in the north, corresponding to the location of the larger, traditional herds, notably: 40% are located in Mara, 25% in Tanga and 20% in Arusha.

14 Milk Processing cont. Operational Parameters Capacity (ltr/dy) % Capacity Operational Capacity 135, Shorfall in Capacity 259, Installed Capacity 395,000 Milk Procesing vs Plant Capacity Operational Capacity 34% Shorfall in Capacity 66% Milk plants are only 34% of capacity due to poor milk supply down time and equipment failure

15 2.4 Import and Export Trends in imports as reported from 2003 to date, is at a constant million liters, mostly ingredients for reconstituted milk, cheese, etc. Tanzania imported US$ 7.0 million. worth of value added products in 2009 compare to 2 million in 2002 This amount has steadily increased over the years, and is well over 26 million liters milk equivalent (MLFD this study), Milk powder makes up 53% of dairy import followed by UHT (33%) in LME

16 2.5 Milk consumption In an economic assessment of the dairy industry (2007) note that of the 70% produced by pastoral/agro-pastoral sector, 90% is usually consumed at the household level All meat and fermented milk is consumed within the neighboring community. A low, between 5-10% of milk from traditional sector enters the commercial market.

17 Milk consumption cont. Milk consumption of products was constrained by high prices for majority buying power is low. Lack of availability, or retailers located too distant from home Potential 20% increase in consumption could arise from flattening seasonal availability. Estimated 60% of population does not drink milk.

18 Milk consumption cont. Type % Milk Hawker to home consumer 64.0 Farm gate sales & direct use 32.0 Processor/agents/home consumer 3.0 Upmarket products 1.0 Total: Processor/age nts/home consumer 3% % Milk Consumer Farm gate sales & direct use 32% Hawker to home consumer 64% Upmarket products 1%

19 Milk consumption cont. From the value chain estimates by MLFD, the bulk of the milk produced, nearly 96% is consumed as warm milk or sour milk, the bulk is either direct home consumption or sold farm gate (32%), while 63% passes through hawkers who buy and sell fresh, untreated, unprocessed milk. A small 3% goes through the MCC to small scale processors, agents, etc to outlets that sell to home consumers, while a small 1% of upmarket processed products goes to hotels, restaurants, tea rooms,

20 Milk consumption con. In an attempt to expand and develop the local market, there have been initiatives like milk promotion campaigns, such as Milk Promotion Week or School Milk Programs (SMP). MLFD (2014) claims this has led to the increase in consumption from 25 to 45 liters/capita.

21 Production (million ltrs) Milk Demand Year Milk Pop 2012 Capita (million ltr) (Mill) (million ltr) , , , , , , , , , , , , , , ,733.0 Note: 42 Based on the 2012 kg/capita/yr Milk Production to Maintain 2012 ltr/cap Capita (million ltr)1 Milk (million ltr) Year To maintain current 42ltr/cap/yr, by 2050, Tanzania will need 5-6 billion ltrs/yr

22 Concluding Remarks Almost all milk produced from improved cattle enters the formal market, hence increase number of high producing improved dairy animals will increase the amount of milk traded formally Improve market efficiency and safety of products along the value chain depends more on the decision of other players i.e. TDB, LGAs and TFDA Regulation of dairy and quality along value chain should be strengthened (TDB, MLFD, LGAs and TFDA) Training of stakeholders i.e. milk traders and hawkers and licensing (formalization) is very important Introduce technologies and investment in dairy products processing which can be implemented by MLFD, LGAs, NGOs and private sector.

23 Concluding Remarks Dairy product consumption promotion campaigns are very important; especially cheese and butter are not popular Dairy technologists training should be done by the MLDF and other private partners to be employed in processing plants (The MLFD is reviewing the curriculum) Imports of dairy products should be regulated, quality controlled and ensure all imports are taxed (enforce law to avoid untaxed imports) in order to provide fair competition environment Quality and safety aspects should be introduced and enforced along the value chain (good milk will result into good product)

24 END ASANTENI KWA KUNISIKILIZA