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Powder purchases drive China’s Q1 dairy imports
Wednesday, 4 May 2022
Chinese dairy[1] imports picked up in the first quarter of 2022, after 2021 started strong but then declined through the year. Dairy imports totalled 940k tonnes in Q1 2022, up 26% on Q4 2021. However, a lift in the first quarter is usual for China, and Q1 2022 imports were down 12% year on year.
Imports of milk powders and concentrates drove Q1 imports overall. Of the three largest import categories, both milk & cream and whey products fell fairly steadily over the last year, with Q1 2022 showing another decline. In contrast, imports of powders & concentrates jumped back up at the start of 2022, after a steady decline through 2021. Powder & concentrate imports totalled 463k tonnes in Q1 2022, double the previous quarter and 3% up on Q1 2021.
China’s powder buying tends to peak in the first quarter of the year, so it is likely we will see a drop off in imports in subsequent months. There have been signs of this already, as the Global Dairy Trade price index has fallen at the last four events, and reports suggest a drop of demand from Asia was a factor.
While a dip in imports between Q1 and Q2 is usual, any large or prolonged drop-off in import demand could pressure otherwise high prices given China’s place as the largest global buyer of dairy products. The actual impact on pricing will depend on the balance between milk production, forecast to be low, and the degree to which China reduces its imports.
[1] Trade codes 0401-0406
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