China looking to make-over the world dairy markets—both as producer and a consumer

February 14, 2005, as reported by just-food.com: With a predicted fifty percent increase in dairy production over the next ten years, China is positioning itself to become a major new world player in the industry. According to a dairy expert quoted by the China Daily newspaper dairy production will rise sharply from the 16.25 million tonnes produced today to an estimated 25 million tonnes by 2015.

Most of the additional production will probably be used to feed China’s growing acceptance of dairy. Wang Huaibao, vice-director of the China Association of Dairy Products Industry expects China’s dairy product consumption will also rise over the next ten years. By his estimates China will be consuming 18 kilogrammes a head of dairy in 2015, up from its current level of 13 kilogrammes a year but still well below the world average of 100 kilogrammes.

“There’s massive potential in the Chinese market,” Wang said. But he warned that it would take a change in attitudes to dairy products. "We have to remember that many people in China are not yet ready to include milk in their diet," he said. "Most of the country's 9 million farmers never drink any because they don't like it or can't afford it."

World threat

While even at 25 million tonnes China will still be a moderate player in the world dairy market -- the United States dairy industry produced in 77.25 million tonnes in 2003 -- with production costs nearly half those of the U.S. or European Union, China will be someone to watch in the coming years.