China is buying huge amounts of dairy on the global market to make up for a local supply-side crisis – keeping international dairy prices strong through the third quarter after peaking in April. In Oceania dairy powder and butter prices were only 10%-15% lower than record levels and cheese prices were only 3% lower than its record. Milk production declined through the first half of 2013 and international dairy trade volumes fell in the second quarter for the first time in four year. At this same time in the second quarter of 2013 China bought 27% more dairy products than in the prior 12 month period – tightening an already tight market. Going into 2014 lower feed prices and strong global dairy prices will likely foster an increase in production in export regions however a softening of prices is not expected until the second quarter of 2014.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free bi-weekly enhanced eNews service