HS Code for low-value dairy preparations

Introduction

In the ever-evolving world of international trade, understanding the intricacies of product classification is crucial for businesses involved in importing and exporting goods. This is particularly true for the dairy industry, where a wide range of products, including low-value dairy preparations, must be correctly classified for customs purposes. In this article, we'll delve into the Harmonized System (HS) codes for budget dairy mixes, processed milk, and low-cost imports, exploring their significance in global trade and how digital logistics platforms like FreightAmigo can streamline the process for businesses.

Recent data from the Food and Agriculture Organization (FAO) of the United Nations highlights the growing importance of low-value dairy preparations in global trade:

• Global trade in milk powders and dairy preparations increased by 2.5% in 2022, reaching 10.8 million tonnes.
• Developing countries accounted for over 60% of global imports of these products.
• The market for budget dairy mixes and low-cost processed milk products is expected to grow at a CAGR of 4.2% from 2023 to 2028.

These statistics underscore the need for accurate HS code classification and efficient logistics solutions for businesses operating in this sector.

Understanding HS Codes for Dairy Products

The Harmonized System is an international nomenclature developed by the World Customs Organization (WCO) for the classification of goods. It consists of six-digit codes, which can be further extended by countries for more specific classifications. For dairy products, including low-value preparations, the relevant HS codes typically fall under Chapter 04 of the HS nomenclature.

Key HS Codes for Low-Value Dairy Preparations

Here are some of the most relevant HS codes for budget dairy mixes, processed milk, and low-cost dairy imports:

• 0401: Milk and cream, not concentrated nor containing added sugar or other sweetening matter
• 0402: Milk and cream, concentrated or containing added sugar or other sweetening matter
• 0403: Buttermilk, curdled milk and cream, yogurt, kephir and other fermented or acidified milk and cream
• 0404: Whey and modified whey products
• 1901.90: Food preparations of goods of headings 04.01 to 04.04, not containing cocoa or containing less than 5% by weight of cocoa

For budget dairy mixes and low-cost imports, the 1901.90 code is particularly relevant, as it covers various dairy preparations that may not fall under the more specific milk and cream categories.

Challenges in Classifying Low-Value Dairy Preparations

Correctly classifying low-value dairy preparations can be challenging due to several factors:

1. Product Composition: Budget dairy mixes may contain a variety of ingredients beyond just milk, making classification more complex.
2. Processing Methods: The level of processing can affect classification, with different codes for fresh, concentrated, or modified products.
3. Intended Use: Some products may be classified differently based on their intended use (e.g., for infant formula vs. general consumption).
4. Value Determination: Defining what constitutes a "low-value" product can vary between countries and customs authorities.

These challenges highlight the importance of working with experienced logistics partners and utilizing advanced digital platforms to ensure accurate classification and smooth customs clearance.

The Role of Digital Logistics Platforms in Dairy Trade

Digital logistics platforms like FreightAmigo play a crucial role in simplifying the complexities of international dairy trade, especially for low-value products. Here's how we can support businesses in this sector:

1. Streamlined Classification Process

Our digital platform incorporates up-to-date HS code databases, helping clients accurately classify their dairy products. This reduces the risk of misclassification and potential customs delays or penalties.

2. Real-Time Rate Comparisons

For budget-conscious importers and exporters of low-cost dairy preparations, our platform offers real-time comparisons of freight rates across various modes of transport. This ensures that businesses can find the most cost-effective shipping solutions for their products.

3. Automated Documentation

We automate the generation of crucial shipment documents, including those that require accurate HS code information. This not only saves time but also reduces the likelihood of errors in paperwork that could lead to customs issues.

4. Customs Clearance Support

Our platform provides assistance with customs clearance procedures, leveraging our expertise in international trade regulations to help clients navigate the specific requirements for dairy imports and exports.

5. Supply Chain Visibility

Through our advanced tracking capabilities, businesses can monitor their dairy shipments in real-time, ensuring that temperature-sensitive products are handled appropriately throughout the journey.

Case Study: Optimizing Low-Cost Dairy Imports

To illustrate the benefits of using a digital logistics platform for low-value dairy preparations, let's consider a hypothetical case study:

A small food manufacturer in Southeast Asia was looking to import budget dairy mixes from multiple suppliers in different countries to support their production of affordable dairy products. They faced several challenges:

• Difficulty in determining the correct HS codes for various dairy preparations
• Inconsistent shipping costs eating into their profit margins
• Frequent delays due to customs clearance issues

By partnering with FreightAmigo, the manufacturer was able to:

1. Accurately classify their imports using our HS code database, reducing customs-related delays by 40%
2. Compare shipping rates from multiple carriers, resulting in a 15% reduction in overall logistics costs
3. Streamline their documentation process, cutting preparation time by 60%
4. Gain real-time visibility into their shipments, improving inventory management and production planning

As a result, the manufacturer was able to maintain competitive pricing for their end products while improving their operational efficiency and reliability.

Future Trends in Low-Value Dairy Trade

As the market for budget dairy mixes and low-cost processed milk continues to grow, several trends are likely to shape the industry:

1. Increased Demand in Developing Markets: Rising populations and changing dietary habits in developing countries are expected to drive demand for affordable dairy products.
2. Focus on Sustainability: Even in the low-cost segment, there's growing pressure to adopt more sustainable packaging and transportation methods.
3. Regulatory Changes: Ongoing trade negotiations and changes in food safety regulations may impact HS code classifications and import requirements for dairy products.
4. Technological Advancements: Innovations in processing and preservation techniques may lead to new types of low-value dairy preparations, potentially requiring updates to HS classifications.

These trends underscore the importance of staying informed about regulatory changes and leveraging digital logistics solutions to remain competitive in the global dairy trade.

Conclusion

Navigating the complexities of HS codes for low-value dairy preparations, including budget dairy mixes and processed milk, is crucial for businesses engaged in international trade. As the market for these products continues to grow, particularly in developing countries, the need for efficient and cost-effective logistics solutions becomes increasingly important.

By leveraging digital logistics platforms like FreightAmigo, businesses can streamline their classification processes, optimize shipping costs, and ensure smoother customs clearance for their dairy products. Our comprehensive suite of services, from rate comparison to automated documentation and customs support, empowers businesses to navigate the challenges of global dairy trade with confidence.

As the industry evolves, staying ahead of regulatory changes and market trends will be key to success. With FreightAmigo as your logistics partner, you can focus on growing your business while we handle the complexities of international shipping for your low-value dairy preparations.

To learn more about how FreightAmigo can support your dairy import and export operations, contact our team of logistics experts today. Let us help you unlock new opportunities in the global dairy market through our innovative digital logistics solutions.

References/Sources

Food and Agriculture Organization of the United Nations, "Dairy Market Review: Overview of global dairy market developments in 2022", https://www.fao.org/3/cc4164en/cc4164en.pdf

World Customs Organization, "HS Nomenclature 2022 Edition", http://www.wcoomd.org/en/topics/nomenclature/instrument-and-tools/hs-nomenclature-2022-edition.aspx