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China's Dairy Demand Could be Abating

23 May 2016

CHINA - Following on from a 40 per cent increase in dairy imports in Q1 of 2016, there are suggestions that China is entering a ‘cooling off period’, AHDB Dairy has reported.

Reports of increased inventories held by processors, along with the low level of buying at a recent Global Dairy Trade (GDT) auction point to a possible slowdown in import demand.

While stock data is difficult to obtain, according to Dairy Markets, dairy product inventory values in the first quarter of this year have rebounded after falling during the third quarter of 2015.

Inventories at Yili Group and Bright Dairy (two of China’s largest processors) as of 31 March were 30 per cent and 51 per cent higher, respectively.

It has been suggested the seasonally high milk production, arising from favourable weather conditions, has contributed to this growth. The high level of imports in the first quarter of 2016 will also have bolstered available supplies, potentially reducing the need for further imports, at least in the short term.


TheCattleSite News Desk

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