January 16, 2017

'China dairy demand evolving'

Trade data from the past five years indicate that Chinese dairy demand is evolving.

An analysis article by the US Dairy Export Council (USDEC) said that while whole milk powder (WMP) still accounts for the largest share of China's dairy imports-30% (355,128 tonnes) in the first 10 months of 2016-this share is down from 45% and volume is down from 621,010 tonnes during the 2014 peak. Incidentally, WMP is the product that cemented China's place as the world's largest dairy buyer.

WMP still saw a rise in Chinese dairy imports during the first 10 months last year (18% year-on-year), but imports of fluid milk, cream, cheese and infant formula rose higher, by 27-51% in terms of volume, and are well on their way to record years, said the analysis article, written by USDEC senior vice president Matt McKnight.

"This marks the second straight year [these products] "held a double-digit slice of the pie-a clear shift from the aggregate 7% import share they averaged from 2012-2014", Knight said.

"Few have doubts about China's bright future as a dairy importer. But the mix of products it wants to buy appears to be shifting", he added.

The article-which listed "China's product mix" as one of five key factors seen to shape the strength of the US dairy export supply opportunity in 2017-also noted that China continues to evolve its food safety regulations to reduce the incidence of adulteration, contamination and counterfeiting that has undermined trust in the domestic food supply.

It said that these attempts to shore up China's food safety system have had far-reaching consequences for dairy and food exporters, as evidenced by China's facilities registration requirements.

New e-commerce rules on infant formula and other dairy products are set to take effect this spring.-Rick Alberto

Read the full article here.