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China's Dairy Industry Overview - 2023

China continues to be a pivotal player in the global dairy market, showcasing immense production capabilities and advanced processing technologies. The country's dynamic trade landscape, coupled with evolving domestic demand, paints a complex picture of both challenges and opportunities in 2023.

Key Statistics

• Number of Dairy Cattle: China is focusing on efficient cattle management amidst ongoing reforms.
• Milk Production Volume: Approximately 36 million tons annually, highlighting China's influence in global dairy output.
• Milk Processing Volume: Around 60.18 million tons per year, showcasing its advanced processing infrastructure.
• Cheese Production Volume: This sector is experiencing growth as consumer demand rises, although specific figures were not detailed.
• Milk Powder and Whey Production: There is an evident decrease of 11% in skimmed milk powder exports, with an increase in whole milk powder production.

Key Enterprises

• Junlebao Dairy Group Co., Ltd.: Known for its IPO and expansion efforts.
• Bright Dairy Holdings: Notable for its significant investments in Synlait.
• Yili Group: A significant force in China's dairy market.
• Mengniu Dairy: A leading player at the national level.

Export and Import of Dairy Products

China's dairy export landscape has shifted with an 11% decrease in skimmed milk powder exports. Imports continue to be robust, driven by high domestic demand, reaching up to 17.18 million tons.

Significant Events

• Junlebao Dairy's Public Stock Offer: Demonstrates its market strength.
• Bright Dairy's Financial Support: Strategic aid to Synlait marks significant collaboration.
• Stabilization Measures: Initiatives focused on optimizing dairy and beef production.
• Global Market Influence: China's demand impacts countries such as Poland.
• UHT Milk Market Projections: Anticipation of a USD 15.2 billion valuation by 2034, growing at a CAGR of 6.5%.
• Food Safety Updates: Current reviews on the standards of sterilized milk are underway.
• Trade Relations: Initiatives like the Forum on China-Africa Cooperation are active.
• Mengniu's Ningxia Facility: Recognized as a 'Lighthouse Factory' by the World Economic Forum.
• Domestic Milk Powder Production: Currently meets 60% of national consumption needs.
• U.S. Dairy Exports: Experience a 13% decline as of September 2023.
• Tariff Considerations: Potential discussions with the U.S. could affect pharmaceutical exports.
• National Dairy Innovation Center: Emphasizes technological advancements in dairy.
• High-Protein Whey Exports: U.S. WPC80+ exports surged by 225% annually.
• Russian Ice Cream Imports: Increased 1.4 times, valued at $2.7 million.

Market Dynamics

China's dairy sector faces challenges such as overproduction, evolving consumer preferences, and intricate trade environments. The rise of domestic companies, increased imports from Russia, and strategic responses to demographic shifts are essential. Despite challenges like reduced powdered milk demand and higher tariffs, China's dairy industry continues to advance through strategic expansions and trade negotiations.

The declining birth rate necessitates innovative approaches, particularly aimed at rejuvenating the market through population growth efforts. Additionally, China's strategic alignment with the European Union and Canada seeks to counteract tariffs imposed by the U.S., highlighting the international trade tensions that persist. China has approved new food safety standards that will ban the production of drinking milk from dry milk powder from September 19, 2025. From then on, only raw milk will be allowed to be used to make sterilized milk. Regions such as China, North Asia, and Oceania significantly contributed to this success, showcasing a remarkable 9.9% rise in like-for-like sales. China plans to cut agricultural imports as domestic production grows in 2025.

China reported a 6.3% drop during January and February, highlighting ongoing global supply issues.

Modified: 2025/04/27