Strategic Policy Measures Revitalize China's Dairy Market Amidst Price Fluctuations
Source: The DairyNews
China’s dairy industry is at a pivotal moment, grappling with an oversupply of raw milk that has led to declining prices, and a relatively weak consumer demand.
To counter these challenges, dairy enterprises are recalibrating their cattle inventories and optimizing resource allocation. Additionally, they are bolstering their research and development in dairy processing technologies, diversifying product offerings, and enhancing product quality to bolster consumer appeal and market competitiveness.
Recognizing the sector's significance, Chinese authorities have implemented supportive measures. Recently, five national departments issued a notice advocating for the increased production of liquid milk from fresh milk. This initiative aims to stimulate liquid milk consumption and stabilize milk prices. Historically, the dairy market's pricing has shown cyclical tendencies. With these new measures, as consumer demand for fresh milk rebounds, the market is expected to stabilize, and a new equilibrium in milk prices is anticipated.
Policy Impetus
On June 24, the National Development and Reform Commission, along with four other departments, released the "Measures to Create New Consumer Scenarios and Foster Growth Points for Consumption". These measures are designed to develop and enhance consumption growth areas, promoting stable consumer spending. Specific strategies include establishing dairy product industry standards and endorsing the use of fresh milk in liquid milk production.
The implementation of these standards is poised to uplift the quality of dairy products, boost consumer confidence, and revitalize dairy consumption. With an oversupply of raw milk leading many dairy companies to convert milk into powder, the push towards utilizing fresh milk for liquid production is expected to elevate fresh milk demand and address the surplus.
Furthermore, the measures outline strategies to develop consumption in specific demographic segments such as infants, young children, and the elderly by expanding relevant consumption scenarios. Dairy companies are encouraged to tailor their products to these groups, potentially boosting dairy consumption and increasing revenue.
Additional policy directives include improving liquid milk standards, regulating reconstituted milk labeling, and promoting the consumption of fresh milk. By 2025, the fresh milk market in China is projected to grow to 57.16 billion yuan. This growth is expected to increase the demand for high-quality milk sources and support a recovery in milk prices.
These policy supports are crucial for enhancing fresh milk demand and revitalizing dairy consumption, providing dairy companies with strategies to manage the excess milk supply effectively. As the industry aligns with these national policies, a positive trend in the dairy sector is anticipated, fostering a recovery in milk prices and promoting a sustainable future for China's dairy market.
Recognizing the sector's significance, Chinese authorities have implemented supportive measures. Recently, five national departments issued a notice advocating for the increased production of liquid milk from fresh milk. This initiative aims to stimulate liquid milk consumption and stabilize milk prices. Historically, the dairy market's pricing has shown cyclical tendencies. With these new measures, as consumer demand for fresh milk rebounds, the market is expected to stabilize, and a new equilibrium in milk prices is anticipated.
Policy Impetus
On June 24, the National Development and Reform Commission, along with four other departments, released the "Measures to Create New Consumer Scenarios and Foster Growth Points for Consumption". These measures are designed to develop and enhance consumption growth areas, promoting stable consumer spending. Specific strategies include establishing dairy product industry standards and endorsing the use of fresh milk in liquid milk production.
The implementation of these standards is poised to uplift the quality of dairy products, boost consumer confidence, and revitalize dairy consumption. With an oversupply of raw milk leading many dairy companies to convert milk into powder, the push towards utilizing fresh milk for liquid production is expected to elevate fresh milk demand and address the surplus.
Furthermore, the measures outline strategies to develop consumption in specific demographic segments such as infants, young children, and the elderly by expanding relevant consumption scenarios. Dairy companies are encouraged to tailor their products to these groups, potentially boosting dairy consumption and increasing revenue.
Additional policy directives include improving liquid milk standards, regulating reconstituted milk labeling, and promoting the consumption of fresh milk. By 2025, the fresh milk market in China is projected to grow to 57.16 billion yuan. This growth is expected to increase the demand for high-quality milk sources and support a recovery in milk prices.
These policy supports are crucial for enhancing fresh milk demand and revitalizing dairy consumption, providing dairy companies with strategies to manage the excess milk supply effectively. As the industry aligns with these national policies, a positive trend in the dairy sector is anticipated, fostering a recovery in milk prices and promoting a sustainable future for China's dairy market.
