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Why is foreign milk powder so expensive in China? (2)

By Zhou Rui, Yao Yujie, and Luo Zhengguang (People's Daily)

16:50, May 28, 2012

The price of milk powder raw materials has recently been on the decline. According to Cao Mingshi, deputy secretary general of Shanghai Dairy Association, the average price of imported milk powder through Shanghai Customs District was about 5,100 U.S. dollars per ton in January 2012, then 1 kilogram milk powder is valued at about 32 yuan (one U.S. dollar equals to about 6.3 yuan). If the milk powder in bulk is divided into canned milk powder after imported to China mainland, the cost of a can of 900 grams of milk powder is no more than 100 yuan plus all kinds of fees such as the marketing cost.

Does the transportation cost push up the price of foreign milk powder? Zhang Xue, a student studying in England, said that the price of a can of milk powder directly mailed by air from England is about 80 yuan plus the duty and tax collected by Shanghai Customs District.

Moreover, the ocean transportation cost of imported milk powder in bulk is far lower than the air transport cost of individual buyers and most of the brands of milk powder sold in Asia-Pacific region are native to New Zealand, which is close to the Asia-Pacific region, rather than the Europe. Therefore, the reason is untenable

According to the No. 10 announcement issued by the General Administration of Customs of China in 2012, the tariff of imported solid and non-solid concentrated milk and cream from New Zealand is 5.8 percent and that of excess parts is 10 percent.

The reporter found at a maternal and child shop of Shanghai that Wyeth Illuma milk powder for infants less than six months, which is added some ingredients including OPO, prices at 408 yuan per 900 grams; the top Abbott organic milk powder prices at 470 yuan per 900 grams.

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