The new challenge in China

by | Aug 17, 2022 | Australia, News

A rumour swept the dairy world earlier this week, after an initial post on Chinese social media, to the effect that China will ban Australian and New Zealand dairy and beef imports. There has been no official announcement, but it has been confirmed from several sources that there are Customs orders halting clearance of Aussie meat and dairy products at certain ports. New Zealand product – at this stage – seems to have been unaffected. The reason being given for the move is the risk of foot and mouth disease, but the suspicion is that this is political, following Australian government supporting US policy on Taiwan.

Despite the trade tensions that flared with the acrimonious relationship between the Chinese and previous Australian governments, dairy trade with China & Hong Kong has remained substantial. Australia’s dairy exports to China were worth $1.5bn in 2021, down from $1.68bn in 2019, and have been dramatically reshaped after IMF trade was drastically pruned.

China is by far Australia’s largest SMP country market, reaching more than 75,000t in 2021 – a record and almost 60% increase on 2020, with value more than doubling. Trade in the first half of 2022 grew another 14%. It has become the second largest cheese market after Japan, growing 50% in 2021, but trade slowed 15% in the first half with weaker foodservice trade in China. WMP trade is smaller but of higher unit value, being mostly IMF base or product.