CPTPP – will it boost dairy exports?

Thursday, 8 June 2023

An outline agreement has been reached for the UK to join the catchily named Comprehensive and Progressive Agreement for Trans-Pacific Partnership (or CPTPP) but questions arise as to what extent the dairy sector might benefit. 

Joining the CPTPP will increase the free trade access to 11 nations (Canada, Mexico, Peru, Chile, New Zealand, Australia, Brunei, Singapore, Malaysia, Vietnam and Japan) and around 500 million consumers. This could boost dairy exports in future and benefit the farmers in the supply chain.

AHDB have commissioned a quantitative impact assessment of how the UK’s accession to CPTPP could benefit the dairy sector. Results from that will be published later this month. Analysis on other sectors is available here. Before that let’s look at the current export scenario of dairy products to CPTPP nations.

Current export situation

The graph below shows exports of butter to CPTPP countries during the last five years and also to the world. UK’s butter exports to CPTPP countries constitute a meagre amount of 0.5% - 3.5% in the basket. Over a period of five years, butter exports to CPTPP nations have declined by around 74% to 245 tonnes in 2022.

butter exports to CPTPP

In the case of cheese, exports to CPTPP countries are around 3% - 6% of total UK cheese exports. Exports have increased by around 82% to 10,397 tonnes in 2022. It has almost doubled in the last five years, as seen in the graph below. Considering the current pace of exports, cheese could benefit the most in the basket with improved market access.

cheese exports to CPTPP

AHDB will be exploring this further in its trade modelling work on the UK joining the CPTPP inconjunction with Harper Adams University. The study will also examine the strategic implications for UK agriculture of joining the CPTPP. Population growth and economic development will be the main drivers for long-term opportunities in these markets. The expansion of the middle-class in the Asian and South American markets will also be a key factor to watch for in the medium to long term.

Going forward with more countries like China, Taiwan, Ecuador, Costa Rica and Uruguay joining the CPTPP, it is likely to open up the gates for long-term opportunities in the dairy sector. This will be subject to other factors like global and economic scenario, climatic conditions in the major producing regions, margins and input costs. Time will help to quantify how exactly the CPTPP deal will influence trade flow in the coming days.

Image of staff member Soumya Behera

Soumya Behera

Senior Analyst (Dairy)

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