China faces up to melamine legacy as dairy exports fall

By Neil Merrett

- Last updated on GMT

Related tags: Milk, Powdered milk, Dairy product

The impact of last year’s melamine milk-contamination in China continues to be felt after dairy exports fell by 10.4 per cent on a year-on -year basis in 2008, creating growing interest for imported brands, claims state media.

An estimated 121,000 tonnes of dairy goods produced in China were shipped from the country last year, reported the Xinhau​ news agency, citing figures from the country’s General Administration of Customs.

Officials suggested in the report that that the contamination of some of the county’s milk supply with the industrial chemical melamine last year significantly shifted the number of dairy products being sold and bought.

Import push

Over the same twelve-month period, dairy imports rose by 17.4 per cent amounting to 351,000 tonnes of product sold, with values increasing by 15.8 per cent to $860m (€662.9) compared to in 2007, according to the figures.

New Zealand, the EU and the US were found to be the key suppliers meeting growing demand for imports over the year, reported Xinhau.

The same findings suggested that Hong Kong and Venezuela were most reliant on imports from the country with sales of Chinese milk powder increasing over the year by 2.9 per cent to 64,000 tonnes, accounting for 52.9 per cent of the total market.

Speculation has grown since the scandal broke that the market is ripe for foreign investors to drive growth and expansion within the country’s milk market amidst consumer concerns over the safety of some domestic products.

Melamine scare

The contamination scandal, which was related to the presence of melamine in milk products, has since been linked to the hospitalisation of thousands of Chinese children as well a number of deaths.

Melamine is a chemical that can make it appear there is more protein in a product, and has been linked to causing kidney stones and other health problems.

The scandal has seen food and beverage products sourced from the country being pulled from shelves around the world over safety fears, leading to a number of multinationals having to review their operations in the country.

A leading executive from Sanlu, which is partly owned by New Zealand-based cooperative Fonterra and has filed for bankruptcy as of last month, is already facing life imprisonment in the country over her alleged role in allowing the goods to be sold.

Europe-based Arla Foods was also affected by the scandal. The group announced in October, that production of milk powders through its China-based joint venture had recommenced, after the installation of new testing systems for production in the country.

Production at the Mengniu Arla milk powder plant in Hohhot, Inner Mongolia, had been out of commission since 16 September when news of the scandal first emerged, the group said at the time.

Related topics: Manufacturers, Emerging Markets

Related news

Show more

Follow us

Featured Events

View more

Products

View more

Webinars