Dairy Products China Monthly Report

Welcome to the August issue of Dairy Products China Monthly Report

In August 2026, the global dairy industry operated at the intersection of "stagflation concerns and supply expansion." Geopolitically, the energy price spike triggered by the Middle East conflict receded with the temporary ceasefire, though its lagged inflationary impact has yet to fully dissipate. US real GDP growth is expected to hold around 2%, while core inflation among G10 countries (excluding the US) has eased to 2.1%. The AI investment boom has emerged as a key growth engine, supporting US corporate earnings and consumer spending.

China's economy maintained overall stability with improving structure in August, as the transition between old and new growth drivers accelerated. In foreign trade, the total value of goods imports and exports rose 17.3% YoY in January–July, with exports up 14% and imports up 22%. On the policy front, the late-July Political Bureau meeting signaled a "moderately accommodative" monetary stance, while fiscal policy targeted "two major" projects and the "six networks" infrastructure initiatives.

For the dairy sector, August marked a pivotal turning point where cyclical and policy forces converged. Hohhot City's designation as "World Dairy Capital" signaled China's shift from scale-driven expansion toward the high end of the global value chain. Mengniu's release of ten major technological innovation achievements—spanning full-chain breakthroughs—redefined growth drivers. Looking ahead, backed by policy support and supply-demand rebalancing, the dairy industry is expected to enter a new phase in the second half of the year, characterized by stabilizing volumes and prices, with a sharper focus on quality and efficiency.