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China, the world’s largest importer of dairy products, is becoming increasingly self-sufficient. But how does this development affect other countries’ exports of key commodities?
Dairy supply has become an important policy topic for the Chinese government since 2018. The country has set itself the goal of increasing milk production by 10 million metric tonnes from 2018 to 2025, which it achieved earlier, only in 2023.
According to Rabobank estimates, this increase has increased China’s self-sufficiency in milk supply from 70 percent to 85 percent, further reducing the country’s dependence on imports. Which dairy products and product categories were most affected by this development?
Whole and skimmed milk powder…
WMP (milk powder) imports were the most important category affected by China’s strategic focus on dairy production, as the world’s largest importer. Imports more than doubled from 2010 to 2022, from 325,000 metric tonnes to around 845,000 metric tonnes, before falling to 430,000 metric tonnes in 2023.
Whey…
According to AHBD (Agriculture and Horticulture Development Board), the volume of whey exported to China fell by 38,700 tonnes in the first half of 2024. USDA FAS forecasts that imports of whey and whey products in 2024 will decline due to a contraction in demand for both food and feed uses due to declining birth rates and lower piglet inventory.
Cheese and butter…
China’s domestic production of these two products is limited by processing capacity, while consumer demand, particularly from more affluent urban consumers, is surging.
However, USDA FAS suggested in its May 2024 report that production will remain limited this year and revised its forecast for cheese imports to remain at 2023 levels due to expected declines in Chinese retail sales and boosted consumption in food services. Similarly, butter imports are projected to decline from 2023 onwards due to lower consumption…
