China is a major market for global dairy products. New Zealand supplied 90% of China’s dairy requirements and, with the benefit of their FTA (Free Trade Agreement), import tariffs of between 6-20% have reduced substantially since 2008 and be eliminated entirely by 2020.
However, last year China sourced several types of dairy products, including infant formula, liquid milk, whey powder and cheese products from the EU after the botulism scare in New Zealand.
In addition, the increasing trend of Chinese buyers shopping for EU infant formula online, along with the cost advantage of European products, is causing concern among local dairy distributers and farmers in China where production costs are much higher.
Chinese farmers are still the third largest milk producers in the world and supply 90% of their country’s requirements, but their increasing number of middle class consumers have opted for the safety of imported infant formula following the melamine scandal in 2008.
If progress is made in the EU-China FTA, it will level the playing field for EU dairy products with New Zealand and mean that more dairy and milk powder products will enter the Chinese market.
Source: Farmers Journal