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Asian Agribusiness Consulting China Dairy Industry Report
Asian Agribusiness Consulting, Jan 2009, Pages: 214
This Asian Agribusiness Consulting report provides an overview of the Dairy Industry in China. The report identifies China's leading dairy industries in the year of 2009 and helps provide information to identify China's largest raw milk producers in China. The report profiles the major milk producing companies within China and the provinces in which they are located. This report looks at price trends of Chinese dairy products over a range of products and provinces. This report covers the effects and recovery of the Sanlu tainted milk scandal. This Asian Agribusiness Consulting report provides extensive and invaluable information on the Chinese Dairy industry and highlights opportunities for growth.
Traditionally China's Dairy Industry has followed ethnic consumption patterns with the majority of the industry located in the north and west of the country. These farms were comprised of small family holdings characterized by low production levels, local consumption and poor quality milk. China's dairy industry has been hit hard after the Sanlu tainted milk scandal, which led to at least six Chinese infants dead and approximate 300,000 with kidney illnesses. The chemical of melamine was added to dairy products to increase their apparent protein content. In response to this scandal, more than 40 countries have so far banned Chinese dairy products and some have stopped importing Chinese goods with any measure of dairy content, which seriously hurt domestic brands.
More and More Chinese consumers preferred to imported milk powder and lost confidence in the domestic dairy products even though authorities have deemed domestic milk powder safe after Sanlu scandal, which is also exacerbated by an influx of cheap foreign milk powder. According to supermarket statistics, currently, the sales volume of imported milk powder represented approximate 60 per cent of total imported milk powder sales, an increase of approximate 20 per cent compared to the same period of last year. Apart from the famous international brand of BIOSTIME, Wyeth, Similac, and Dumex, the milk powder of SUNFILE brand from New Zealand has entered into Chinese domestic market. The foreign funded and imported milk powder enterprises extended taking the advantage of the opportunity, leading to sharp reduction in the domestic milk powder demands. Chinese dairy companies closed a wrenching fiscal year in 2008 with poor sales and falling stock prices after scandal. The yields of the dairy products in China were 18.11 million tonnes in 2008, only up by 1.3 per cent compared to previous year, which showed the dropping tendency in the fourth quarter of 2008. Without the melamine scandal, the yield would be approximate 20 million tonnes. Dairy farmer suffered more loss since melamine event, due to lower raw milk purchasing prices, milking stations unaccepted any raw milk as well as dairy companies have tightened their standards. The farmer had to dump milk and sold part of their heads for slaughter because they faced a perfect storm of destructive economic forces. Official figures from Hebei showed that, approximate 5,900 tonnes of raw milk from Sept 14 to 16 were dumped because major dairy companies stopped buying fresh supplies. Similar cases have been reported in all the major milk-producing regions in the country. Agriculture authorities inspected all of the country's 20,393 milk collection stations between November 2008 and April of this year, of which 3,908 lacked testing equipment or were not sanitary and were therefore shut down.
The central government set aside 300 million CNY ($43.9 million) in subsidies for dairy farmers after melamine scandal. According to the Ministry of Health, the subsidies mainly went to dairy farmers who suffered the greatest financial losses in the five major dairy-producing provinces of Hebei, Liaoning, Shanxi, Shandong and Henan, as well as the Inner Mongolia autonomous region. Now, Sales of dairy products have started to recover nationwide, except in Hebei, where the melamine contamination of dairy products was the worst.
Products Mentioned in this Report:
- Fresh Milk
- Milk Powder
- Condensed Milk
- Cream
- Milk Whey
- Yogurt
- Cheese.
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