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Dairy Imports to China Continue to Grow

28 May 2012

Buoyed by strong domestic demand, China’s overall dairy imports continue to perform strongly according to Michael Hussey from the Food and Beverage Division, Bord Bia – Irish Food Board.

Imports from January-August 2011 reached $1.7 billion, up 35 per cent in value terms on the same period a year earlier.

Greater domestic demand for dairy products, combined with lower tariffs on dairy products from New Zealand, a reduction of the VAT on pasteurised and UHT milk from 17 per centt to 13 per cent and a stronger Chinese currency against the US Dollar have all helped to drive China’s imports.

New Zealand is the largest supplier to China, accounting for 69 per cent of China’s total imports.

The United States is the second largest supplier. US exports to China from January – August 2011 reached $161 million, nearly 10 per cent of China’s total imports.

Provisional 2011 export figures from the CSO show that the most significant dairy exports from Ireland to Hong Kong & China continues to be Infant Formula at a combined €98 million, followed by whey powder at €24 million and SMP at €6 million. All three categories grew by 20 per cent, 52 per cent and 56 per cent respectively on 2010 levels.

Volumes of whey imports into China for the first quarter of 2012 showed an increase of 35 per cent compared to 2011 at 95,200 tonnes.

The largest supplier was the US accounting for 38 per cent of volume (primarily feed grade product), followed by France 17 per cent, Netherlands and Argentina seven per cent each and Germany and Poland with six per cent each. Ireland accounted for three per cent of supply.

This made Ireland the fifth largest supplier of whey powder to China by volume.

The average price of Irish whey powder in March 2012 was 39 per cent higher than March 2011 at US$2,386/tonne.

Whey imports for 2012 are forecast to grow by 10 per cent over 2011 driven by higher demand for infant formula, food processing and feed.

May 2012

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