Low-cost products in the internationalization of agri-food markets: The case of European exports of milk powders to West Africa

Abstract

The internationalization of agricultural markets is a process that has been underway for many decades, some areas of the planet having a greater potential for agricultural production than others, at least in proportion to their population. The development of trade in agricultural and agri-food goods, encouraged in particular by logistical progress and liberalization policies (lowering of customs duties), concerns low value-added products (low-cost) destined for the poorest countries on the planet. The following analysis focuses on one of these products, namely blends of milk powder and palm oil, where trade flows have been growing rapidly for about a decade. The focus is on imports from West African countries for this particular product, which are mainly supplied to the European Union (EU), where these products are not traded. This approach has three main objectives: to gain a better understanding of the internal and external logic behind the development of these flows; to quantify the importance of these trade flows and the potential substitution effects that they induce in terms of imported dairy products; and to discuss the implications that these imports may have for local dairy sector.