The recovery in Chinese demand in global dairy markets over the last 12 months has been a real boost for milk prices.

China, the world’s largest dairy importer, has recorded strong import demand throughout the first half of 2017 and this looks likely to continue for the second half of this year.

Healthy demand

Import figures for July show healthy demand right across the dairy commodity complex.

Whole milk powder (WMP) imports stood at 40,150t, which is almost two-thirds (+63%) on the same period last year. New Zealand accounts for almost all of this product.

Chinese buyers have also been taking advantage of the weak price of skimmed milk powder (SMP) in recent months, showing strong growth in exports.

For July, SMP imports doubled to more than 26,250t with almost half of this volume sourced from New Zealand.

Infant formula imports remain vibrant, with almost 25,000t imported for July, a 20% increase year on year.

Supplying China

The Netherlands is the biggest supplier to China, accounting for 31% of imports.

Ireland remains the second-largest supplier with a 17% share, just ahead of France and New Zealand with a 15% share each.

The volume of whey imported to China for July increased 5% to 47,000t, while butter and milk fat imports increased 7% year on year to 8,600t.

Cheese was the only major dairy commodity to record a decline in demand, with imports falling close to 15% in July to 8,750t.

Profits rise 8% at FrieslandCampina in the first half of 2017

Arla milk prices for 2017 are almost 50% higher than last year