China’s Infant Formula Imports Recovering Strongly in 2015

China’s imports of infant formula have recovered strongly during the first four months of 2015, suggesting that demand is still strong in China despite a surprise fall in imports last year.

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China imported 47.76 tonnes of infant formula between January and April, a rise of 16% compared to the same period last year, according to the latest data from China Customs.

This will come as welcome news to global dairy companies after imports of baby formula to the Asian superpower fell slightly in 2014, the first time imports had declined in six years.

However, these latest figures appear to confirm what we suspected at the time the 2014 figures were released – that the drop in imports last year was a result of external factors affecting supply, not a decline in demand.

A 16% increase indicates that Chinese consumers still favor foreign infant formula, though the market does appear to be slowing down slightly. Imports grew 24% per year on average between 2000 and 2013, and were also up 24% year on year in Q1 2014 before a tough new registration system introduced in May curtailed imports.

Contrasting fortunes for major exporters to China

The list of countries supplying these imports has remained largely unchanged this year, but some are faring much better than others.

New Zealand and France are still struggling, with imports from these two nations down 25.7% and 54.8% year on year respectively after also dropping significantly last year. As Danone is a major client of Fonterra, it is likely that both countries are still being affected by the scandals that have plagued the New Zealand cooperative during the past two years.

On the other hand, infant formula from the Netherlands, Ireland and Germany is performing extremely well in China. Imports from these nations were up 71.7%, 91.6% and 336.9% year on year respectively during January-April.

Figure 1: Infant formula imports to China, January-April 2015

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