China’s dairy imports recovered ‘substantially’ in 2016

China’s dairy imports recovered substantially during 2016; however figures remain below 2014 levels, a year that saw speculation driving import levels way above market requirements, Suki Wu of Bord Bia’s Shanghai Office has said.

The import volume of whole milk powder (WMP) for January to October 2016 reached approximately 352,000m tonnes – which Wu said is an increase of 18% on the corresponding period in 2015.

New Zealand continues to account for the bulk of WMP imports supplying over 333,000m tonnes in the January to October period.

Compared to the corresponding period last year, this is an increase of 15% on their shipments.

According to China Customs the average price for WMP imports decreased this year by 8.2% to US$2,554/MT.

Meanwhile, Wu said that imports of skimmed milk powder (SMP) decreased by 7% in the same period amounting to just over 161,000m tonnes while the average price was US$2,150/MT.

“The main supplier was New Zealand with 98,000m tonnes while Australia and the US supplied 13,500m tonnes and 12,490m tonnes respectively, according to Wu.

“Whey powder imports during January to October 2016 increased by 15.2% to reach over 411,900m tonnes.

“The US is the main supplier accounting for 55% just under 230,000m tonnes, followed by France accounting for 11% at 44,900m tonnes.”

Ireland’s whey exports to China in January to October 2016 were 12,815m tonnes, a decrease of 14% on the corresponding period 2015.

In the January to October period last year, Wu said that liquid milk imports surged 50% compared to the same period in 2015 reaching 524,000m tonnes.

She said that the main supplying countries are Germany (34%), New Zealand (19.7%) and France (19.2%).

Heavy discounting on online sales has had an impact on retail UHT milk prices in China, with prices decreasing substantially over the last two years, she found.

Infant Formula

In the January to October period of 2016, China imported over 171,280m tonnes of infant formula, an increase of 28% on the corresponding period last year, Wu said.

“The increase reflects somewhat on the relaxation of the one child policy however it is mainly driven by reductions in sales of domestically produced formula.”

Ireland is China’s second largest supplier with just under 26,000m tonnes, behind the market leader The Netherlands which supplied 61,000m tonnes in this period.

“Ireland’s strong position in the super premium category is reflected in a much higher US$16,725/T CIF (cost insurance and freight) price compared to the Netherlands at US$13,150/T.

“China combined dairy import requirement now places it in a position to influence world prices. The outlook for dairy imports looks positive despite some slowdown in the overall economy,” she said.