Globally, the dairy sector is probably one of the most distorted agricultural sectors: producer subsidies are in place in many developed countries, encouraging surplus production, export subsidies are paid by governments to place the excess production on the world markets, and tariff and non-tariff barriers are erected both by developed and developing countries to protect their dairy sector from 'unfair' competition. These market distortions are having significant and different impacts on producers and consumers in developing and developed countries, which are however extremely difficult to quantify. This paper is the first volume of a study on the impacts of global dairy trade on developing countries, giving an overview of global dairy production, consumption, industry structure, trade, applied policies and international standards. Different developments are occurring in the global dairy sector at the moment: Production in developed countries is falling (together with the number of dairy cows and farms), while productivity is rising. Simultaneously milk production in developing countries is growing strongly and numbers of cows are increasing. This development is mirrored in consumption. Dairy consumption levels in developed countries are constant or falling, whereas in many developing countries, foremost in East and Southeast Asia and driven by population growth and growing per capita incomes, dairy consumption is rapidly increasing. With consumer demand in developing countries rising faster than domestic production, global dairy trade volumes are increasing as well with import demand of developing countries being the major driver. In the second volume of the study, the dairy sectors of six developing countries (Bangladesh, Jamaica, Peru, Senegal, Tanzania and Thailand) will be analyzed in order to identify the impacts of (subsidized) milk powder imports on milk producers and consumers.