Madagascar

Concentrated Milk

Supplement

The following communication, dated and received on 6 October 2025, is being circulated at the request of the delegation of Madagascar.

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Pursuant to Article 12.5 of the Agreement on Safeguards, Madagascar hereby notifies the results of the mid-term review of the safeguard measure concerning imports of concentrated milk.

1.     Specify the measure and the product subject to the measure for which the mid-term review was conducted, and provide reference to the WTO document that notified the safeguard measure subject to the review.

The mid-term review concerns the safeguard measure applied to imports of concentrated milk classified under the following headings of the Malagasy customs tariff nomenclature: 04029100 and 04029900.

The application of this safeguard measure was notified to the WTO in document _G/SG/N/8/MDG/9-_G/SG/N/10/MDG/9-_G/SG/N/11/MDG/9/Suppl.1.

2.     Provide the dates of initiation and conclusion of the review.

The review investigation was initiated on 13 March 2025.

3.      Describe the results of the review, providing some detail on the basis for reaching those results.

(a)    Import trends over the safeguard application period

i.   Import trends in absolute terms

In absolute terms, the volume of imports of concentrated milk remained more or less stable in 2024 following the implementation of the safeguard measure, increasing by only 1 index point compared with 2023. This confirms the stability of imports despite the application of the measure.

ii.  Import trends in relative terms

Relative to domestic production, the volume of imports shrank in 2024. Imports decreased significantly by 20 index points compared with the previous year. This is due to the introduction of the measure in 2023 and the increase in local production volume.

(b) Indicators

i.   Domestic consumption

In 2023 and 2024, the volume of domestic consumption increased. In 2024, domestic consumption rose by 13 index points compared with the previous year.

ii.  Market share taken by imports

The market shares taken by imports and the domestic industry moved in opposite directions. In 2024, the market share taken by imports shrank. It fell by 10 index points in 2024 compared with 2023. Conversely, the market share of the domestic industry grew by 22 index points. Nevertheless, imports continue to hold the largest share of the concentrated milk market (61%).

iii. Production

The domestic industry's production volume increased during the second year of application of the measure. With the opening of a new manufacturing plant in 2024, the domestic production volume of concentrated milk increased by 27 index points compared with 2023.

iv. Sales

The application of the safeguard measure to imports of concentrated milk increased the sales of the domestic industry. In 2024, the domestic industry's sales volume rose by 38 index points. This trend shows that the domestic industry was able to benefit from the growth in domestic demand.

v.  Production capacity utilization rate

The opening of a new manufacturing plant for concentrated milk in 2024 doubled production capacity, accounting for an increase of 118 index points. However, the domestic industry failed to leverage this growth in production capacity, which could have increased its production volume. Accordingly, the production capacity utilization rate fell sharply by 42 index points in 2024 compared with 2023.

vi. Employment

The domestic industry's workforce has expanded over the past two years. This is necessary to ensure the operation of the new manufacturing plant.

vii.        Productivity

The domestic industry's productivity plummeted during the second year of application of the measure, falling sharply by 54 index points. This is due to the industry's difficulty in capitalizing on its investments to increase production capacity.

viii.       Inventory

The inventory of concentrated milk declined by 5 index points in 2024. However, it remains at a high level, generating additional costs that negatively impact the domestic industry's profit margin.

ix. Profitability

Over the past two years, the domestic industry's profitability has increased slightly. The domestic industry's profits grew by 9 index points in 2024. However, this trend is not commensurate with the increase in sales.

(c)  Conclusion of mid-term review

While the domestic industry's production volume, sales, production capacity and workforce increased in 2024, boosted by the opening of a new manufacturing plant, its production capacity utilization rate and productivity plummeted. Moreover, the domestic industry's profitability did not increase commensurately with sales due to a smaller profit margin.

Accordingly, even if the introduction of the safeguard measure concerning imports of concentrated milk encouraged the industry to invest in increasing its production capacity with a view to strengthening its position in the domestic market, the industry's development remains constrained by mass imports of "creamer", a directly competitive substitute product for real concentrated milk that is sold at a lower price. To this end, the safeguard measure needs to remain in place for both real concentrated milk and directly competitive products.

4.     Indicate whether:

i.       the measure has been, or will be, withdrawn as a result of the review. If yes, then indicate the date of withdrawal; and,

The existing safeguard measure concerning imports of concentrated milk is to remain in place.

ii.      the pace of liberalization has been, or will be, increased as a result of the review. If yes, then indicate the revised timetable for progressive liberalization.

The pace of liberalization has not been modified.

In accordance with Article 9.1 of the Agreement on Safeguards, the measure shall not be applied to imports of concentrated milk originating in the following developing country Members of the WTO:

Afghanistan; Albania; Angola; Antigua and Barbuda; Argentina; Armenia; Bahrain; Bangladesh; Barbados; Belize; Benin; Bolivia, Plurinational State of; Botswana; Brazil; Brunei Darussalam; Burkina Faso; Burundi; Cabo Verde; Cambodia; Cameroon; Central African Republic; Chad; Chile; Colombia; Congo; Costa Rica; Côte d'Ivoire; Cuba; Democratic Republic of the Congo; Djibouti; Dominica; Dominican Republic; Ecuador; Egypt; El Salvador; Eswatini; Fiji; Gabon; Gambia; Georgia; Ghana; Grenada; Guatemala; Guinea; Guinea-Bissau; Guyana; Haiti; Honduras; India; Indonesia; Israel; Jamaica; Jordan; Kazakhstan; Kenya; Kuwait; Kyrgyz Republic; Lao People's Democratic Republic; Lesotho; Liberia; Malawi; Maldives; Mali; Mauritania; Mauritius; Mexico; Moldova; Mongolia; Montenegro; Morocco; Mozambique; Myanmar; Namibia; Nepal; Nicaragua; Niger; North Macedonia; Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Peru; Philippines; Qatar; Rwanda; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Samoa; Saudi Arabia; Senegal; Seychelles; Sierra Leone; Solomon Islands; South Africa; Sri Lanka; Suriname; Tajikistan; Tanzania; Thailand; Togo; Tonga; Trinidad and Tobago; Tunisia; Türkiye; Uganda; Ukraine; United Arab Emirates; Uruguay; Vanuatu; Venezuela, Bolivarian Republic of; Viet Nam; Yemen; Zambia; Zimbabwe.

Additional information and comments should be sent to the following address:

Monsieur Le Directeur Général de l'ANMCC

Bâtiment Maison des Produits 67 Ha 101 - ANTANANARIVO – MADAGASCAR

Tel.: (+261) 34 05 441 41

Website: ANMCC

Email: dg.anmcc@gmail.com; dg@anmcc.mg

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