Dairy imports into China declined 12% last year owing to higher local supply and lower consumer demand. Powder imports fell due to a 38% decline in WMP volume year on year. In contrast, SMP imports showed modest milk increase, with quantities increasing by 3% in 2023 compared to 2022. Meanwhile, USDA estimates reveal that Chinese milk output surpassed 41 million tons last year, rising 4.6% from 2022 and 28% from 2019 levels.
The shift in the Chinese economy and its impact on demand, particularly for dairy in the foodservice industry, has further impacted demand as consumers tighten their purse strings. New Zealand continues to be the leading supplier of dairy products to China, accounting for 42% of the market in 2023, with milk and cream accounting for another 30%. Other major importers are the United States, Germany, and Australia. The UK has a 1% market share in Chinese dairy imports, accounting for 72% milk and cream in 2023, or 16,000 tons.
Import levels from all significant locations into China fell, with New Zealand’s imports falling by approximately 183,000 tonnes in 2023. However, China’s domestic production of high-value goods, such as cheese and butter, is now constrained by processing capacity, leaving room for usage in bakeries and foodservice industries. Chinese cheese consumption has surged in recent years, with a compound growth rate of 16% between 2012 and 2022.
