Rural Bank general manager of agribusiness Andrew Smith said in 2012 China imported 20,000 tonnes of milk powder, then 29,000 in 2014 and 30,000 last year.
Rural Bank’s Ag Answers Australian dairy update shows milk powder exports to China rose 53 per cent for January to August this year in comparison with the same period last year.
Mr Smith said July to September was historically China’s lowest volume period for milk powder imports.
In July this year, it imported 2.8 times more milk powder compared with July last year. In August, it imported 3.4 times the volume of August last year.
“It’s good because we are getting product in there and if we’re able to build a market as the price goes up, then we’ll keep that value there,” he said.
Mr Smith said last year the price was $2900 a tonne while this year it was $2300/tonne.
“The market has been happy to pay the higher price before,” he said.
The dairy update shows global prices have been falling since June with the skim milk powder price below the five-year 20th percentile mark.
Mr Smith said a big stockpile of milk powder in the European Union was helping to keep a lid on prices, possibly making Australian milk powder more affordable for China, Malaysia and Singapore.
He said in July and August Malaysia imported twice as much milk powder as usual.
“Malaysia had an uptick in the past financial year, but it’s really ticked up in July and August,” Mr Smith said.
“It has started to validate the story around the growing middle class in these countries.
“They have a desire for protein and milk powder.”
He said Singapore had also been a “pretty steady” importer.
The report said national milk production was tracking slightly above this time last year.
South Australia recorded the biggest jump, sitting at 12.7 per cent above this time last year.
Victoria was 0.9 per cent above this time last year.
Mr Smith said Victoria had stabilised in terms of cow numbers and there was a “feel in the market that farmers were milking a few more.”
“There’s been a bit better spring and better returns,” he said.
