HS Code 04.05 – Butter and other fats and oils derived from milk; dairy spreads

HS code 0405 is a 4-digit heading in the Harmonized System that covers: Butter and other fats and oils derived from milk; dairy spreads. Heading 0405 encompasses butter and other fats and oils derived from milk, including dairy spreads. This classification focuses exclusively on products where milk fat is the primary or sole fat component. It covers traditional unsalted and salted butter, clarified butter (ghee), butter oil, and anhydrous milk fat (AMF), which are highly concentrated forms of milk fat. The inclusion of 'dairy spreads' refers to emulsions predominantly composed of milk fat, distinguishing them from margarine or other vegetable fat-based spreads. This heading is critical for differentiating pure milk fat products from blended fats or non-dairy substitutes, which fall under other HS codes. For international trade, the classification under 0405 is crucial due to often high tariffs, quotas, and specific labeling requirements related to fat content and origin. These products are vital in culinary applications, baking, and as ingredients in various processed foods. Historically, butter has been a significant agricultural commodity, and its trade reflects global dairy production capacities and consumer demand for natural dairy products. This heading clearly defines the boundaries for milk fat products within Chapter 04, ensuring accurate duty assessment and compliance with food standards.

Unsalted butter, salted butter, clarified butter (ghee), butter oil, anhydrous milk fat (AMF), cultured butter, organic butter, spreadable butter, dairy spreads (high milk fat content), skimmed butter, goat milk butter, sheep milk butter, butter with added herbs (predominantly butter), concentrated butter, butter blends (predominantly milk fat), fresh butter, frozen butter, whipped butter, European-style butter, Irish butter, Danish butter, Indian ghee, butter fat, milk fat, butter concentrate.

A common mistake is confusing 0405 with 1517, which covers margarine and edible mixtures or preparations of animal or vegetable fats or oils. The key distinction is that 0405 is exclusively for products where the fat is *derived solely from milk*. If a spread contains a mixture of milk fat and vegetable oils, or is entirely vegetable fat-based, it belongs to 1517. Another error is classifying cream (0401/0402) as butter. While butter is derived from cream, cream itself is an emulsion of fat in water, whereas butter is a water-in-oil emulsion, a distinct product with different physical and chemical properties.

In 2025, the top exporters of HS code 0405 in UN Comtrade data were New Zealand ($3.5B, 23% of world exports), the Netherlands ($2.2B) and Ireland ($2.2B). World exports came to about $15.5B, adding countries' reported figures and partner-based estimates for those that did not report (UN Comtrade data). Countries that did not report 2025 data are estimated from partner records, which can understate them.

In 2025, the top importers of HS code 0405 in UN Comtrade data were France ($2.1B, 14% of world imports), China ($1.2B) and the Netherlands ($1.1B). World imports came to about $15.0B, adding countries' reported figures and partner-based estimates for those that did not report (UN Comtrade data). Countries that did not report 2025 data are estimated from partner records, which can understate them.

HS code 0405 is a 4-digit heading under Chapter 04 of the Harmonized System. The first 2 digits (04) identify the chapter, and digits 3-4 (05) specify the heading. This code contains multiple 6-digit subheadings for precise product classification.