China’s dairy import figures grow by 20%

China imported nearly 20% more whole milk powder (WMP) in January-September this year than it did in 2015, totalling around 342,000t, AHDB Dairy has reported.

This is similar to the annual volumes imported in 2010-2012 and well below the exceptional levels seen in 2014, when imports hit 670,000t.

The increase appears to be driven by reduced supplies in China, rather than rising demand. China’s domestic milk production has struggled due to low farmgate prices and high summer temperatures, helping trigger additional demand for imports.

AHDB analysts believe that steady growth in consumer demand is likely to be needed to underpin a more sustainable recovery in import volumes.

However, even with steady demand growth, China’s ability to buy in bulk and stockpile is likely to continue to contribute to peaks and troughs in global dairy pricing.

Meanwhile, the combined milk production of the world’s five main exporting regions continued its decline in August, with the daily milk production equivalent down 0.3% compared with July.

Despite being the start of the new season in the southern hemisphere, New Zealand milk production in August, was down 2.7% on August last year.

Sustained low farmgate prices in Europe have meant that EU28 production has fallen in June, July and August on the same months last year.

However, the drop in production appears to finally be stabilising, with a fall of just 0.1% month-on-month in August.

Four of the five key regions have recorded year-on-year decreases for cumulative production from April to August. Argentina was down 16.8%, Australia down 7.3%, New Zealand down 1.1% and the EU28 down 0.3%.

Only the US has shown an increase, with production 1.3% higher than the same period in 2015.

September production figures are now available for the US and New Zealand. Seasonally adjusted milk production in the US is showing a further increase, and production is now running 2.1% above September last year.

Meanwhile, New Zealand production in September is put at 1.1% up on last year, partly reversing the deficit recorded in August.