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27 July, Dairy Comment

By Paul Willows

Global dairy markets have been under pressure for the past two months – largely due to a significant slow in demand from China and Sri Lanka.

It could be argued that China probably over-purchased during 2021 and as result; import of WMP and SMP have declined around 40%.

The story is a bit more complicated- with domestic fluid milk production growing at 8-10% per annum over the past 4 years, Chinese reliance on world supply’s is diminishing.

Chinese domestic demand has suffered due to the Covid lock down- but there are signs of improvements.

Don’t expect China to come support current domestic Australia milk prices. Prices on the Reiman exchange hit an historical high of $11.60 ms/kg, as local processors fight for supply.

Long may this competition last.

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