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China's Dairy Industry Overview - 2023

China remains a crucial entity in the global dairy market, marked by substantial production capacities, advanced processing infrastructures, and dynamic trade operations. The year 2023 highlights efforts towards industry modernization and significant engagements in international trade.

Key Statistics

• Number of Dairy Cattle: Ongoing reforms have obscured precise figures, but cattle management advancements are notable.
• Milk Production Volume: Approximately 36 million tons annually, underscoring China's impact on global dairy production.
• Milk Processing Volume: Around 60.18 million tons per year, reflecting China's advanced processing capabilities.
• Cheese Production Volume: On the rise, driven by increasing consumer demand.
• Milk Powder and Whey Production: Skimmed milk powder exports have decreased by 11%, while whole milk powder production is increasing.

Key Enterprises

• Junlebao Dairy Group Co., Ltd.: Known for its significant IPO and strategic expansion efforts.
• Bright Dairy Holdings: Offers substantial investment to enterprises like Synlait.
• Yili Group: A major player in China's dairy landscape.
• Mengniu Dairy: Prominent within the national dairy scene.

Export and Import of Dairy Products

China's exports of skimmed milk powder have decreased by 11%, whereas high-quality dairy imports amount to 17.18 million tons, catering to the substantial internal demand.

Significant Events

• Junlebao Dairy's Public Stock Offer: Illustrates market strength.
• Bright Dairy's Financial Support: Provides strategic aid to Synlait.
• Stabilization Measures: Aimed at optimizing dairy and beef production.
• Global Impact of Chinese Demand: Influences markets, including Poland.
• UHT Milk Market Projections: Expected valuation at USD 15.2 billion by 2034, with a CAGR of 6.5%.
• Proposed Food Safety Updates: Current reviews on sterilized milk standards.
• Strengthened Trade Relations: Initiatives like the Forum on China-Africa Cooperation.
• Mengniu's Ningxia Facility: Recognized as a 'Lighthouse Factory' by the World Economic Forum.
• Domestic Milk Powder Production: Covers 60% of national consumption needs.
• U.S. Dairy Exports to China: Recorded a 13% drop as of September 2023.
• Potential U.S. Tariff Talks: Could affect pharmaceutical exports.
• National Dairy Innovation Center: Established to promote dairy technology advancements.
• High-Protein Whey Exports: U.S. WPC80+ exports surged by 225% annually.
• Russian Ice Cream Imports: Increased by 1.4 times, valued at $2.7 million.

Market Dynamics

The Chinese dairy sector encounters challenges such as overproduction, shifting consumer preferences, and complex trade situations. Entities like China Youran Dairy Group Limited are on the rise, with China becoming a key importer of Russian dairy products. Despite domestic pricing challenges, companies like Danone and Yakult Honsha Co. aim for sustainable growth. Projections indicate a 2.6% annual decline in milk production by 2025, diverging from global trends. U.S. tariff adjustments continue to influence China's import strategies, impacting levies. Recent agreements have alleviated previous restrictions on German dairy products due to disease concerns. The Chinese dairy market maintains a global influence by strategically adapting to shifting scenarios. Demographic changes, including efforts to increase birth rates, may also steer future industry trends. Further expansion follows successful product launches, such as ready-to-drink coffee. Despite reduced demand for powdered milk, driven by increased domestic output, China reports a 7.6% rise in dairy imports focused on butter and cream. China has emerged as the leading destination for meat exports with 2,601 tonnes worth USD 12 million annually. Currently, China faces heightened tariffs amid the US-China trade conflict, marked by a 34% tariff on U.S. dairy imports. Mainland China’s CSI 300 index saw a nearly 5% drop as equities in China and Hong Kong declined sharply following Beijing's announcement of broad retaliatory tariffs against new U.S. trade measures. Notably, major Chinese dairy companies Yili and Mengniu have not matched the upward trends. China announced it will raise retaliatory tariffs on U.S. goods to 84%. The country's government has expressed its intent to deepen cooperation with Kazakhstan and strengthen strategic coordination to uphold the principles of multilateral trade.

Rising tariffs between the U.S. and China are putting pressure on key dairy exports like whey and lactose, sparking concern over the potential of lost sales and falling prices.

Modified: 2025/04/12