Dairy imports set to grow to meet Chinese appetite for milk

Throughout China the demand for milk is rising. This is for many reasons; small-scale farmers leaving the industry, large-scale farms still being in the development stage (not enough cows) and the Chinese demand for more milk, according to agricultural banking analysts Rabobank.

Now this means that China have had to import more milk from other countries just to keep up with this demand. In fact China have to import up to 20% of its milk from other countries such as New Zealand to appease the growing demand. However the Chinese government are taking strides towards reaching it’s zenith by improving supply chains and strengthening the raw milk quality.

The ways in which they are going to do this is by increasing the amount of large-scale dairy farms and accelerating the cows’ rate of growth. This decision has been proven well, as large-scale dairy farms were producing 17% of the countries milk in 2008. Yet three years later in 2011 they produced 27% of China’s milk production. This all points towards dairy self-sustainability in China, but even though progress still continues to grow, exporters to china will be pleased to know that the window of opportunity for trade is probably going to remain for years to come. This is until China can provide enough milk to support the domestic demand.

Furthermore China’s sudden urge to import milk in a time of a shrinking global supply of dairy has caused dairy prices to be at an all time high. This has happened because they now have to outbid other countries with the same problems as well as keeping up with domestic demand. Which all contributes towards why demand for imports are growing despite the large amount of cost. In time these costs will eventually decrease as local milk production increases, which will soon allow China’s dairy products to compete with imported dairy products.

The reasons as to why China has adapted a more westernised diet is because of products becoming more global and as this grows China may have to import more than just milk in the foreseeable future, Rabobank says. – reporting by Joseph McCarthy