Chinese dairy imports show expected trend break

Imports of whole milk powder, by far the largest dairy product supplied by China, fell by 11% in October compared to the same month last year to 33.0000 tonnes. The decline reflects a trend break. In the first ten months of this year, imports increased by 38% to 752.000 tons. Sales of whey powder also fell last month, by 10% to just under 50.000 tons.

Whey powder also shows a trend break. In the period January to October, imports are a quarter higher than in the same period last year. The import of skimmed milk powder showed no decline in October. At 32.000 tons, the import volume was almost 30% higher than last year. Over the first ten months, imports increased by 34% to 374.000 tons. European exporters gratefully benefit from this.

Does China have its dairy reserves in order?
The decreased import figures of whole milk powder and whey powder insinuate that China now has its strategic dairy reserves at a reasonable level. Rabobank, among others, previously stated that it expected Chinese dairy demand to decline in the second half of this year. In the third quarter, the higher Chinese import figures contradicted this expectation, but not anymore in October. The decline could also be because production volumes in Europe and New Zealand are under pressure, as a result of the significantly lower milk supply. Or possibly it is a combination of both.

Baby milk powder shows a logical decline
The import of baby milk powder has been under pressure all year. Last month the import figure fell by 21% to around 20.000 tonnes. Viewed over the entire year, sales are a quarter lower at 217.000 tons. The decline is a logical consequence of the low Chinese birth rate. This fell to a historic low in 2020, according to figures from the Chinese National Bureau of Statistics. Last year, China recorded 8,52 births per 1000 people, a marked decline from 10,41 in 2019 and the lowest rate since the founding of the People's Republic of China in 1949.