Welcome to Dairy Products China News 1404
The climate index of domestic dairy industry stands at 97.5 in Q1 2014, which was issued by Chinese officials institutions on 27 April. The climate index is 0.4 point higher than that in Q4 2013, indicating a rebounding trend of domestic dairy industry. It seems that domestic consumer confidence for dairy products is gradually rising as the improvement of product quality, which promotes the recovery of demand and thus boosts production.
During Q1 2014, domestic raw milk price firstly appeared stable or even a slight decrease, following the continuous rise since 2013. The decreased cost has stimulated the performance growth of dairy processors. For example, those leading or regional players like Bright Dairy, Yili, Beingmate and Xinjiang Tianrun Dairy are all expected to obtain an obvious profit growth in Q1 2014. Of course, increasing demand and raised price have also make a contribution to their performance growth.
In the long run, some factors would play a lasting effect on the prosperity of domestic dairy industry, such as the two-child policy, income growth of residents, the rapid urbanization process, etc. Meanwhile, some unfavorable factors still exist, such as still tight supply of raw milk, shadow of some security incidents, the significant gaps between domestic and foreign brands, etc.
RMB Exchange Rate: USD1=RMB6.1503, source: The People's Bank of China.
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