China’s thirst for imported UHT milk grows

China’s imports of UHT milk have soared over the last three years, increasing from 40,000 tonnes in 2011 to over 184,000 tonnes last year.

According James O’Donnell, Asia Director with Bord Bia these growth rates have been much higher than those experienced in other dairy categories such as infant formula or other powders.

He said: “The business will continue its fast pace in 2014, and experts are forecasting that the volume could reach 300,000 tonnes this year. Despite these figures, imported liquid milk still only accounts for around 2% of China’s liquid milk consumption. On the domestic front, Yili group is the dominant player, accounting for over 25% of the market.”

O’Donnell noted: “While the overall growth in consumption is driving the growth, lack of domestic supplies and safety concerns are also contributing. Raw milk prices in China are amongst the highest in the world, presently around RMB4.8/kg (€0.58).”

“European countries are well represented as a source of supply, with Germany accounting for around 42% of imports, followed by France with 14%. New Zealand represents 18%, while Australia has around 12% import share.

Interestingly O’Donnell highlighted that internet sales and promotions are fast becoming the most important sales channel. A recent promotion online with Yihaodian, a leading platform, sold over 30 containers in less than 1 hour. Moving volumes at this level requires deep discounts, in some cases 50%.