Report: Biofuel Production Has Driven Milk Prices Up in China

The report, “China Dairy- Market Review & Outlook 2007-2008 Proposal” finds that China’s dairy industry is greatly influenced by the trends in international dairy markets. Consequently, it has been affected by the rising prices of corn, which is now being used to manufacture biofuels. Raw milk prices have risen, being directly linked to the fact that prices for foodstock for cows has risen.

In addition, it is also impacted by the dairy production and export subsidy abolishment in the EU, which seriously influenced the production of raw milk and dairy products among EU members.
Authors of the report say that in the domestic market, the export price of whey and milk powder as raw material increased by a large margin. There has also been an increase in the demand for domestic dairy material.

In addition favourable pricing has meant that the international market has paid a great deal of attention to Chinese milk power, causing a dramatic export growth in the sector.
Analysts say that in the second half of 2007, there was a great pressure on dairy enterprises, profit hitting the lowest level among dairy processing enterprises. The study says that the dairy industry in China is witnessing a formidable change. In keeping with the current situation, the Central Government put forward new legislation promoting a healthy development to China’s dairy industry, which will significantly influence the future dairy industry in China.

PRLog