Chinese Dairy Market Looks Promising

Dutch Trader submits:

The global dairy market is likely to remain tight in 2011, due to an improvement in demand but limited supply, according to Rabobank. The bank said in its Global Dairy Outlook report last December that although consumption rates are set to be strong in the new year, growth in some regions will be constrained by physical limitations of supply.

Drought in Russia and floods in Pakistan will heavily impact local milk production in the first half of 2011, said Rabobank.

While these conditions are likely to create increased demand for imports, the bank said that domestic consumption is likely to be restricte! d . Consumption is expected to be supported by improving labour markets in the West, strong economic growth in import regions and strong buying in China.

Factors effecting supply levels include higher feed costs, ongoing requirements for farmers to reduce debt levels and the likelihood of limited supply growth beyond


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