Strong competition for sales

July 05, 2017

Rabobank dairy analyst Sandy Chen was in Victoria last week, speaking about the Chinese appetite for Australian dairy products.

Chinese consumer confidence in Australian dairy products is high, but the nation faces strong competition on retail shelves.

Rabobank dairy analyst Sandy Chen told Country News there was considerable interest and demand for Australian products but other countries had a bigger share of the market.

Over the past five years, Australia’s share of China’s imports has slightly more than caught up with China’s import growth.

‘‘For example, import growth in liquid milk was about 11 per cent a year, but imports from Australia grew at about 15 per cent per year,’’ Mr Chen said.

‘‘That’s not too bad considering Australian milk production was stagnating or declining.

‘‘But imports from New Zealand are quite dominant.’’

Mr Chen, who is based in Shanghai, said Australia’s share grew from five per cent to six per cent last year.

White and flavoured milk are among the biggest categories, but yoghurt will continues to grow at a fast level and butter and cheese are expected to grow at about 15 to 20 per cent annually in coming years.

‘‘But butter and cheese are extremely small categories compared to white milk and flavoured milk categories.’’

There has been a hiatus in Chinese demand for Australian dairy products over the past two years due to a number of factors.

‘‘Since 2013 we started to see marked slowdown in consumption growth from China to single digit demand,’’ Mr Chen said.

‘‘There was a general economic slowdown, secondly there were periods of high pricing impacting consumption growth, and thirdly a maturing in certain categories, including white milk category and flavoured milk.’’

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