Welcome to the March issue of China Dairy News
Global macroeconomics faces dual pressures of stagflation and recession risks. Geopolitical conflicts have elevated energy prices, with imported inflation exacerbating policy divergence across major economies. Rabobank projects the global dairy market will shift from volume-driven growth to tight equilibrium in H2 2026, as production growth slows in key regions—pressures compounded by feed cost volatility and Middle East instability.
China's economy posted a strong Jan.–Feb. 2026 opening: industrial value-added rose 6.3% YoY, with high-tech manufacturing up 13.1%, underpinning industrial upgrading. Consumption recovered modestly, yet dairy players remain squeezed between upstream overcapacity and downstream demand stimulation, amid protracted raw milk price weakness and intensifying competition.
At this year's Two Sessions, "deep-processing breakthroughs" and "consumption expansion" emerged as industry responses to policy signals. Capital markets' reappraisal of regional dairies' differentiated models points to a new M&A cycle. Meanwhile, EU import controls on China-sourced ARA underscore supply chain security imperatives, accelerating domestic upstream players' technology breakthroughs and import substitution.
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