Tuesday, 11 June 2019 07:54

Cheaper by the billion

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Ever wondered what would happen if China attempted to become self sufficient in dairy?

Aside from the environmental degradation, one of the fears about dairy intensification in China was always, what happens when China can simply reproduce that same basic bargain bin milk powder product even more cheaply than NZ can?

Well, we got a glimpse last week.

A2 Milk Co, the global champion of A2 infant formula, this month lost $1 billion value of stock after China unveiled a plan to boost local output and reduce reliance on imports.

Under the new programme, China aims to exceed 60% self sufficiency in baby formula and improve the quality of domestic brands in its US$27 billion infant formula industry.

 

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No surprise in softer WMP price

Softer whole milk powder (WMP) prices are not surprising given China’s strong import activity recently and the steadily increasing WMP pricing, says Rabobank dairy analyst Emma Higgins.

 
 

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