New Zealand imported raw milk tariffs raise domestic dairy prices or face a dilemma

In the absence of confidence in the domestic dairy product market, the increase in import tariffs on raw milk in New Zealand will in turn lead to a corresponding rise in the cost of some dairy companies. The terminal prices will rise or not rise, and domestic dairy companies may need to think about it.

Import tariffs raised to 15%

The General Administration of Customs recently announced that starting from February 26 this year, it will increase the tariff on raw milk imported from New Zealand to 15%. The industry's “raw milk,” which is native to New Zealand and contains more than 1% unconcentrated milk and cream, is the raw material for making raw milk powder.

The announcement shows: "As of February 22, 2011, the total amount of imported milk and butter with fat content greater than 1% in New Zealand originating from New Zealand (Tax Code No. 04012000, 04013000) was 1561.113 tons, plus last year The total amount of 198.529 tons imported in the way, the total quantity has exceeded the number of 1505 tons of special safeguard measures this year. Therefore, as of February 26, 2011, the import duty will be levied on the above-mentioned products at the MFN rate."

According to the “Daily Economic News” reporter, the raw milk imported by China’s dairy companies is currently mainly from countries and regions such as New Zealand, the Netherlands, the United States, and Japan. Among them, only raw milk imported from New Zealand accounts for 70% of total imports.

There is no impact on terminal prices. According to the reporter's knowledge, at present, most dairy companies in China are “large customers” of raw milk for New Zealand. Some companies that lack milk sources or companies that focus on the sour milk market will choose to use New Zealand’s raw milk. Some food companies that produce ice cream or biscuits also need some milk sources. In addition, many companies choose to use imported raw milk in order to produce high-end milk powder.

Earlier, some media reports pointed out that the increase in import tariffs on raw milk will directly lead to rising company costs, and the terminal price of milk powder may thus rise.

The reporter contacted several well-known dairy companies in Guangdong. Yashili said in a reply to a reporter that because Yashili did not import such products, it would have no effect on the overall price. Mead Johnson also stated that although Mead Johnson's imported raw milk is also partly from New Zealand, due to the wide range of raw material purchases, there is currently no plan to raise prices.

According to Wang Dingmian, a dairy expert, the increase in import tariffs on raw milk will not be reflected in the terminal prices soon.

Wang Dingmian said that the terminal price of dairy products depends on the product's overall cost calculation, including raw materials, transportation costs, storage costs, packaging materials costs and non-production and operational losses. Tariffs are only one of the aspects, and the impact is also Not great.

Although the companies interviewed said they had an impact on their terminal prices, the increase in tariffs also stimulated the market’s expectations of rising milk powder prices. Wang Dingmian said that when the price of raw materials fell, there was no corresponding price reduction for imported milk powder, but this increase in import tariffs may be the reason for the rise in foreign milk powder prices.

“Doesn’t dare to increase prices in domestic dairy companies?” said Wang Dingmian. Originally there was no advantage in competition with imported milk powder. If prices follow the trend, then the only price advantage will be lost. How will domestic milk powder be? Competing with imported milk powder?

Under such circumstances, the terminal price of milk powder will rise or not rise, which may make the domestic dairy companies, which are already having a hard time, fall into a dilemma again.