Demand for dairy set to decline as consumers remain under pressure

A recent report by the South African Milk Producers' Organisation paints a bleak picture for future demand for dairy and dairy products in South Africa over the short term

-  Janine Ryan

Demand for dairy products in South Africa is not expected to increase in 2023 due to limited consumer spending, according to a recent report released by the South African Milk Producers’ Organisation. The report said that consumer spending was expected to remain under pressure due to shrinking GDP growth, largely on the back of severe and persistent load-shedding.

The report, ‘Brief summary of information about key variables relevant in respect of expectations regarding the performance of the South African dairy industry in the immediate future’, said that in 2021 and 2022, demand for unprocessed milk and dairy products had declined. Demand was likely to remain subdued in 2023, the report added.

“The expected GDP of South Africa in 2023 does not support expectations about greater demand for consumer goods (including dairy products), and continuation of load-shedding can render the expectation that the GDP will grow in 2023 by 0,1% invalid,” the report explained.

It added that consumers remained under pressure due to high inflation, poor service delivery by the public sector, and weak economic performance.