Himfr Reports Dairy Prices Will Increase

2009-11-23 22:20 481

BEIJING, Nov. 23 /PRNewswire-Asia/ --, one of China's leading B2B search platforms with more than 30 B2B industry websites to its name, reports that dairy prices will increase.

China's dairy industry is out of its slump; the recovery trend is evident. Himfr's latest statistics show that the recovery trend of China's dairy industry is exceeding expectations; industry sentiment index continues to show recovery as dairy cattle breeding volume, milk production, and sales remain robust. However, although the Chinese dairy industry is recovering, the cost of raw materials is rising, leading to price increases further along in the supply chain.

Himfr's analyst believes that at present, prices of fresh milk produced in China are gradually rebounding and the market is recovering from the melamine scandal. In addition, it is evident from the reported earnings of several major listed companies that the dairy industry is maintaining growth, and profits are increasing. In addition, the pace of acquisitions has also quickened.

Himfr's agricultural data show that in the first week of November, the average price of milk in 10 major milk-producing provinces was 2.48 yuan / kg, an increase for the 13th consecutive week. Dairy herds also continued to grow in size from for the seventh consecutive month. It is also worth noting that the north will enter a long cold winter during which time milk production will drop to less than one third of the usual amount, which will boost prices, but also put pressure on the prices of raw materials.

First is the pressure from price increases. Raw milk prices rising will increase the cost of milk prices, which is extremely unfavorable for milk enterprises whose performance is picking up. Second are the upstream procurement price increases, which to a certain extent explain increased demand from downstream milk enterprises as demand for raw milk increases. Milk supply will experience shortages, which is not conducive to the recovery and development of the dairy industry as a whole. The upcoming New Year's Day, Spring Festival and other festivals will increase consumption, and demand for dairy products will show further growth.

If the prices for dairy raw materials continue to rise, then companies will face tremendous cost pressure, and end-market prices rising would be inevitable. Himfr's analyst expects that early next year milk and dairy products market prices will rise, and now this possibility has increased.

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