The latest import figures from China show the country’s appetite for whole milk powder (WMP) has continued to tail off in the last couple of months. For October, Chinese imports of WMP declined 11% compared with last year to below 10,500t. This is the second consecutive month of declining Chinese WMP imports following the sharp decline (-47%) in imports seen in September.

Despite these two months of declines, Chinese WMP imports for the year to date are still running 18% ahead of this time last year at more than 355,000t.

The one dairy product that continues to generate strong import demand in China is infant formula. For October, Chinese infant formula imports were up by almost a third (31%) to just under 19,000t. For the first 10 months of 2016, infant formula imports are close to 175,000t, up 27% year-on-year.

The drop-off in Chinese import demand for WMP in recent months has certainly played a role in the flat-lining dairy futures markets at present. The WMP futures market, based in New Zealand, reached its peak in mid-November following the last result from the GDT, where WMP prices rose another 3.2%.

However, since then the WMP futures market has stalled somewhat as questions remain over the depth of market demand we will see in the new year. January, February and March contracts for WMP have declined marginally (-1%) in the last fortnight. This is despite continuing signs that New Zealand milk production is experiencing a major correction and there will be less availability of WMP moving into 2017.

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