China Imports Better Than Expected After Virus

After a short delay, China released its much-anticipated trade statistics for the first two months of the year. The data was better than expected given the height of the China’s Covid-19 epidemic hit in these months. During the first two months of year, China imported 62,950 metric tons (MT) of skim milk powder (SMP) after adjusting for leap day. That was 26% less than the previous year. But that was higher than the five-year average pace of 58,850 MT for the same period. A year ago, China, like several other countries, availed itself to low-cost Intervention SMP. Because the world’s stockpile of SMP is far less than a year ago, it is likely that China’s import volumes will be less than last year through June. Still, volumes were positive—especially given the impact of Covid-19. Whole milk powder (WMP) imports were similar with volumes falling just 6.5% behind last year’s pace. In total, China imported 217,543 MT after adjusting for leap day. Again, given disruptions at ports and reports of higher milk powder production in China during this period, these figures were positive. For other products, China increased imports during the first two months of the year, suggesting that, but for Covid-19, demand has been looking up. Butterfat imports during the first two months of the year jumped 64.5% over the same period last year. New Zealand accounted for 95% of the total volume, with the rest coming from Europe. Similarly, cheese imports were up 13% compared to last year. China’s Cheddar cheese imports from the United States increased to 472 MT, accounting for 7.5% of the total. The grated and powdered cheese import category was similar, with the United States holding a distant second position to New Zealand, but much improved. Whey imports climbed 4.6% over the same period last year. The United States accounted for 42% of China’s total whey imports in the first two months of the year. Today, CME spot markets retreated across the board, led by declines in butter. Futures markets again tested daily limits lower.

DailyDairy Vol. 8, No. 247 / March 26, 2020 REPORT C