September 21, 2009

 

China sparks surprise dairy revival

 

 

Thanks largely to renewed buying from China, the world dairy market has shown a greater than expected environment.

 

A Rabobank dairy report says most dairy commodities have risen between 25 and 35 per cent in the last three months.

 

The bank's dairy analyst Tim Hunt said the increases are a surprise.

 

He said it's fair to say the market's recovered quicker, and to a higher point, than they thought it would. 

 

The main factor behind that is that Chinese buyers have come into the market for a lot of product in recent months, Hunt said.

 

A health scare last year that saw melamine discovered in infant formula is thought to have triggered the increase in China's buying of foreign dairy products.

 

Since the melamine crises, Hunt says there's a distinct switch in the preference by Chinese consumers for imported product, which they perceive to be safer.

 

He also said the world dairy market had relatively cheap prices for whole milk powder in relative to the cost of sourcing that locally in China.