China’s Rural Revitalization Initiative Prioritizes the Dairy Sector

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China’s No. 1 Document released in February outlines the steps the country will take in revitalizing its rural areas, and investment in China’s rebounding dairy industry was of top priority. After the 2008 melamine scandal, China became heavily dependent on foreign imports of powdered milk. Since then, the dairy industry has shown signs of growth. For the first time in 2012, China exceeded Russia in production of cow milk, and as of 2017 ranks fourth in the world. The USDA forecasts that China will produce 36.5 million tonnes in 2018. Domestic consumption of cow milk followed the same trend by exceeding Russian consumption in 2012, and China is forecast to consume 38.68 million tonnes in 2018.

The Development Bank of Singapore (DBS) published a report identifying future opportunities for growth in the Chinese dairy industry. It encourages investment in downstream dairy firms like China Mengniu and Bright Dairy, and further investment into these companies would align well with the No. 1 Document’s stated goal of promoting domestic dairy brands. According to DBS, fermented milk products like yogurt and cheese are projected to sustain greater than 10 percent compound annual growth rate (CAGR) through 2021. As China starts to prioritize their relatively underdeveloped markets, Gro Intelligence can provide subscribers with the data and analytics necessary to stay on top of industry developments.

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