Consumption of milk and dairy products is rooted in dietary habits in Western countries. They are countries which have today the largest consumers led by Europe. Finns hold the world record for milk consumption with more than 150 litters per year and French are leader in the consumption of butter and cheese. In Asia, the situation is quite different. If India is a country with strong and entrenched dairy traditions, China is less attracted to dairy consumption. However in China, habits tend to evolve rapidly.
According to a study by the office of international markets, the Chinese retail market for dairy products accounted for the total of 36.6 billion dollars in 2010 and is expected to increase 80% by 2016. This market attracts brands of dairy beverages, infant formula, yogurt, ice cream … and even cheese and butter. Sales of dairy products in the food service sector reached almost 4.7 billion dollars in 2010.
Imports of dairy products in China have more than doubled over the past five years. China has not only increased its imports of finished dairy products, but also increased imports of ingredients to produce dairy local products.
It is expected that the production and consumption of dairy products continue to grow including the scandal of 2009 contaminated with melamine products. The prices of dairy products are also on the rise, as more products and well-being of high quality health enter the market in response to the melamine scandal. There was also an upward trend in prices due to the increase in imports, the cost of labour and other elements, such as increased demand while domestic production is low.
So it’s no surprise that all eyes are on China as the new Eldorado food chains. And despite a strong agricultural policy, China’s production should be difficult to follow, especially because of the constraints of urbanization, degradation of farmland, uncertainties of water resources, but it is mostly limited by its problems to safety. This is why the Chinese food imports have increased fourfold in a decade.
Today, Europe’s leading supplier, France occupies 2.7% of the Chinese market, with the wine, cognac and dairy products. The French food exports to China reached 1.55 billion Euros in 2012 (+15% compared to 2011). The trade balance of the food balance between France and China is in excess of 981 billion Euros against 357 billion in 2010. There is room for significant growth for other products that China also needs, including dairy products, even if France ranks second behind New Zealand milk powder.