November 14, 2007

China: Dairy import prices up 39.8 percent on-year

The Customs General Administration of China said on Monday (Nov 12) that the country's import volume of dairy products in the January-August period had declined 18.7 percent on-year while average prices of these products were up by a significant 39.8 percent on-year.

Drought in Australia, subsidies for diary products in Europe and lower exports from Argentina and India were citied as reasons for the reduced import volume and higher prices.

Meanwhile, domestic dairy processing companies that depend partially on foreign suppliers for whey, full cream and skim milk powder may have to raise prices of their finished products in order to maintain profitability.

In the past week, Sanyuan and Yili had already raised the prices of some of their liquid milk products. Mengniu is also expected to follow with a price hike announcement in December.

RMB1=US$0.1345 (Nov 14)