This month in Dairy Products China News we cover a typical range of topics: these include new entrants to China’s retail dairy market from Europe and the US; the efforts of local businesses to reposition into new categories, to raise expansion funds or to extricate themselves from PR disasters of their own making; government regulations’ impact on the production sector and the impact of E-commerce – to mention just a few.
China is a country where we are used to figures going up almost as fast as the skyscrapers they have become so fond of. It has been habitual to return from there with growth rates of 15-20-30% or more ringing in one’s ears in stark contrast to local expectations in Europe and the US. Even the slower GDP growth this year is still stellar by most international comparisons.
It’s interesting, therefore, that this month we see two diverse but significant sets of dairy market numbers decreasing. One has been the price of infant formula being sold in the country’s ever more important E-commerce sites – following the director of the National Dairy Products Quality Inspection Center high lighting the reality that many foreign infant formula retail in their home market at a fraction of what they sell for in China. There are several factors behind this, but it’s a change which will undoubtedly bring relief to local consumers. Another change has been the recent slide in the country’s farm gate milk price whilst processor sand traders sit on stocks. The market’s fundamentals haven’t altered, but as restructuring progresses apace,depending on how far they travel and how fast, both trends could have profound implications for international dairy trade and its key participants.
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