June 27, 2007

China accounts for 50 percent of global growth in dairy production

Demand for dairy products in China had recorded significant growth in the recent years. Currently, China accounts for about 50 percent of the annual growth in diary production volume globally.

At the Fifth China Dairy Summit held in Nanjing recently, Wei Kejia, Secretary-General of China Dairy Association, reported that China's output of dairy products in 2006 had increased 11.4 percent on-year. Milk production in 2006, at 12.44 million tonnes, was up 8.6 percent compared with 2005.

In 2006, average consumption of dairy products by Chinese residents was 25.6kg. Average fresh milk consumption had increased 2 percent on-year to 18.29 kg, while average consumption of milk powder declined 4.2 percent on-year to 0.5 kg. Yoghurt consumption per person had increased 14.9 percent to 3.79 kg.

Despite the rapid development, China's dairy industry is also facing stiff challenges in the form of rising production cost and intense competition that resulted in margin squeeze. This summit thus served as a platform for industry participants to look into ways to address these issues and to sustain the pace of growth for the industry as a whole.