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Dairy Investment Wanted, but Times Getting Harder?

29 May 2012

CHINA - Chinese dairy product import levels were unexpectedly low for March 2012, reflecting modest levels of domestic demand.

These are figures to watch as private consumption needs to rise to reduce the need for investment spending. Doubters over the economy’s future are not hard to find, although most private sector forecasters remain positive.

The Asian Development Bank, for one, expects GDP to rise to 8.5 per cent in 2012 and consumption to grow by 12 per cent in 2012 and 2013, reflecting higher wages and rising government expenditure on social services. It believes the latter will encourage Chinese consumers to save less: going on price trends, they may well have to, reports Dairy Products China News.

The Chinese government is wanting international dairy companies to establish industrial-style farms to produce high quality fresh milk for its consumers weary of food scares centred on dairy products. Ironically perhaps – although in truth this signifies a structural adjustment in the sector which should surprise no-one – the corollary of this is that for many dairy farmers in China life is getting harder.

The recent reduced prices for milk being paid by Wondersun in Heilongjiang present a contrast to the April prices rises from Mead Johnson and Nestlé. Such price rises appear to have limited impact on sales, reflecting the specifics of the product category.

TheCattleSite News Desk



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