Surge in Chinese milk consumption and imports, but not from Australia

Consumption of liquid milk within China has been increasing rapidly since 2020 with growing imports from New Zealand and EU. Australia’s import volumes, however, have remained flat despite increased demand.

Michael Harvey, Rabobank senior dairy analyst, reports that with many of 2020’s full-year reports being released now, numerous dairy companies in China have indicated a rapid revenue growth for ‘white milk’.

Harvey said that demand for milk in China is expected to continue over the coming decade from drivers such as low per-capita consumption and increased investments due to the known health benefits of dairy products.

“Liquid milk imports into China notched up a couple of major milestones in 2020, with September last year the first time more than 100,000 tonnes of liquid milk have been imported in a calendar month,” said Harvey. “Last year was also the first time that China has imported more than one million tonnes of liquid milk in a calendar year.”

The three largest milk exporters to China are New Zealand, The European Union (EU) and Australia, with the EU reporting the highest increase in export volumes in 2020. New Zealand milk volumes increased by nine per cent while Australia volumes remained low.

Harvey, however, said that the low imports from Australia was a “reflection of market dynamics, not trade tensions”. He cited that factors such as low production and competing markets had hindered Australia’s volume level.

Impacts from the COVID-19 pandemic, Harvey said, also played a role in changing export volumes.

“Several of the EU’s major markets in the North Africa region have also had significant COVID-19 issues and these, combined with political and civil disruption in this region, have impacted the flow of exports into these markets,” said Harvey.

“And this has resulted in the EU directing an increased volume of liquid milk into China and picking up share in this market.”


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