China starts to import more milk powder from Australia
China purchased more whole milk powder (WMP) in July but it was not all supplied by New Zealand. In the month of July 2013 China’s WMP imports lifted to 33,707 tonnes, a 9% jump on the same month is 2012. However the volume supplied by NZ was less than the same time last year with the shortfall being made up largely by Australia and Chile. NZ’s market share in the month of July was still very very high at 84% but this was well less than the 98% share held the same time last season. On a year to date basis China’s WMP imports have surged, with a 41.5% increase in volume recorded. During this time period NZ supplied over 95% of the WMP with Australia (the next largest supplier) supplying less than 2%. The diversification in China’s WMP sources may have been driven by the lack of product available from NZ in recent months. Supply from NZ has been restricted due to the drought earlier this year causing milk production to fall well short of expectations during the latter part of the 2012/13 production season. The latest available trade data is for the month of July, so would not have been impacted by Fonterra’s botulism contamination issue that surfaced at the beginning of August. WMP was not directly implicated in the food safety scare, but Fonterra’s reputation has been tarnished nonetheless. Since the botulism scare dairy companies in Australia have reported heightened interest in their products as buyers look to diversify their supply options.