Chinese milk production declined 2.9% YOY in July, according to the latest China Dairy Monthly Report. This was the seventh consecutive monthly decrease, with milk production estimated at 33.94bn kg over the last year. Liquid milk consumption was +6.8% YOY for the month, implying a 24% decrease in “manufacturing milk” availability.

With lower milk availability, local WMP manufacturing declined since April, and inventories at the end of July fell to 241,000t. Stocks-to-use were 86% above the five-year average. Meanwhile, SMP stocks-to-use at the end of July were 17% below the five-year average considering weaker imports and higher exports. Domestic SMP production increased by 77% YOY to 67,500t during the last 12 months.