Shortages send milk prices in China to 2nd highest in world
September 29, 2013 Leave a comment
Shortages send milk prices in China to 2nd highest in world
Yeh Wen-yi and Staff Reporter
2013-09-29
The price of raw milk in China has increased since July due to shortages in supply, as the price of the commodity in the country has become the second most expensive in the world behind only Sweden, according to media reports. China Mengniu Dairy Company reported that the price of raw milk has increased 12% on average and domestic dairy companies including Mengniu, Bright Dairy and Sanyuan have given notice to supermarkets about potential price increases.Guangzhou’s 21st Century Business Herald reported that China stopped milk imports from New Zealand after some milk powder was found to have contained botulism bacteria. Dairy companies that previously purchased New Zealand milk have turned to domestic suppliers, which has created a bottleneck.
Chen Yu, director of the Dairy Association of China, said the current supply of domestic milk being unable to meet demand is due in part to cows maturing slowly.
Additionally, some cattle breeders slaughtered their animals after mad cow disease was reported in some areas of China last year.
A report by the China International Capital Corp (CICC) suggests that demand for milk in China was recorded at 502 million tonnes in 2013, while domestic output stood at 411.8 millions tonnes.
The price of domestically produced liquid milk has increased by 5%-17% since late August.
CICC said prices of dairy products are likely to go up 10% in the second half of this year in response to rising costs.
To avoid shortages, some experts suggest enhancing the scale of raising cows while expanding and stabilizing production so the Chinese dairy industry will not be hit by repeated supply shortages.
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