Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


China’s ‘white gold rush’ – opportunities for NZ dairy

China’s ‘white gold rush’ – opportunities for New Zealand dairy

The Chinese dairy market is one of the world’s largest – and most significant – being the fastest growing, presenting big opportunities for the New Zealand dairy industry to cash in on China’s ‘white gold rush’, according to Rabobank.

Visiting dairy farmers around New Zealand last week, Shanghai-based Rabobank senior dairy analyst Sandy Chen says that the rising income of currently low-income consumers will drive growth of dairy demand into the next decade.

Mr Chen says the imbalance in the development of supply chains in China has led to a series of milk contamination – be it deliberate or accidental – scandals in recent years, which have contributed to the rising wave of imports seen going into China.

“The reliance on imported feed components and other challenges such as availability of land, water, biosecurity considerations and environmental protection factors will make it difficult to increase self sufficiency levels quickly for China,” Mr Chen says.

“With ongoing investments into their dairy industry capacity, local supply will rise over time but this will come at a cost.”

Adding to this, Mr Chen says that product safety has become an increasing concern for the Chinese consumers and this will be an important factor when it comes to brand value in the future.

Part of Rabobank’s Food & Agribusiness Research and Advisory division, Mr Chen
joined Rabobank in early 2013. In this role he researches and analyses trends and developments in the Chinese dairy market.

Mr Chen says that China already dominates the global traded market for dairy
commodities so greatly that small changes in China’s demand and supply balance have a large impact on the global market and therefore commodity prices.

“As a result of how important China is in the global market place, New Zealand dairy farmers should endeavour to keep up to date with Chinese market trends,” he says.

“High milk production costs in China, for example, will result in imported product remaining attractive and this will continue to play an important role in fulfilling Chinese demand.”

Regulatory changes in China will also continue to impact the supply chain, Mr Chen says, and all participants will need to keep informed and adapt quickly.

“Chinese dairy consumers are already sophisticated and place high expectations on milk producers for quality, food safety and sustainability characteristics, providing a high level of evidence in these areas will become more and more crucial,” he says.

“This is where New Zealand has an opportunity to take advantage of its image as a reliable producer of quality, traceable dairy products destined for the international market. The fundamentals are there, now it’s time for the New Zealand industry to secure that market share by finding its ‘edge’ on other competitors looking to the Chinese dairy industry opportunities.”

Mr Chen presented these views to industry stakeholders and dairy farmers last week in various locations including New Plymouth, Wanganui, Palmerston North, Masterton, Invercargill and Christchurch.

Rabobank regional manager East Coast George Murdoch says that bringing an expert such as Sandy to meet with clients in their local areas provides extremely valuable insights for farmers interested in the opportunities taking place in China at present.

“China has been an integral part of the global dairy market for quite some time now and hearing Sandy present this week has reinforced the future growth that will materialise in due course,” Mr Murdoch says.

“Giving our clients a chance to hear Sandy and his current on-the-ground perspectives of the Chinese dairy industry really benefits local dairy producers to gain insights into a very important market. With Rabobank’s sole focus on agriculture, this sort of first-hand knowledge-sharing is a massive value-add for our clients, helping them to make informed decisions for their business.”

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Warming: Warming Signs From State Of Climate Report

Climate data from air, land, sea and ice in 2013 'reflect trends of a warming planet' -- says the latest State of the Climate report, launched by U.S. and New Zealand scientists. More>>

ALSO:

Scoop Business: Embrace Falling Home Affordability, Says NZIER

Despair over the inability to afford a house is misplaced and should be embraced as an opportunity to invest in more wealth-creating activity, says the principal economist at the New Zealand Institute of Economic Research, Shamubeel Eaqub. More>>

Productivity Commission: NZ Regulation Not Keeping Pace

New Zealand regulators often have to work with out-of-date legislation, quality checks are under strain, and regulatory workers need better training and development. More>>

ALSO:

Callaghan Innovation: Investment To Help Deepen Innovation Reporting

Callaghan Innovation, the government’s high tech HQ for Kiwi business, is to help deepen New Zealand media coverage of the commercialisation of innovation through an arms-length partnership with independent business news service BusinessDesk. More>>

ALSO:

Tax Credits, Grants: Greens $1Bn R&D Plan

In the Party’s headline economic announcement, the Greens have launched their plan to build a smarter, more innovative economy which has as its centrepiece an additional $1 billion of government investment in research and development (R&D) above current spend, including tax breaks for business. More>>

ALSO:

Inflation: CPI Increases 0.3 Percent In June Quarter

The consumers price index (CPI) rose 0.3 percent in the June 2014 quarter, Statistics New Zealand said today. This follows rises of 0.3 percent the March quarter and 0.1 percent in the December 2013 quarter. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news