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Rise in prices of imported milk powder after clampdownv

(Global Times)

16:07, October 12, 2012

There has been a rise in prices of some foreign brands of milk powder following a clampdown by the New Zealand authorities on illegal exports of the product, but it is not certain that other foreign milk powder brands will follow suit, experts said Thursday.

"Some dealers (of other brands) may follow suit but it is unsure whether producers will follow or not," Chen Lianfang, a dairy analyst at Beijing Orient Agribusiness Consultants, told the Global Times Thursday.

The Ministry for Primary Industries (MPI) of New Zealand and New Zealand Customs Service announced on September 28 that they would take measures to stop unlawful exports of infant formula from New Zealand to China.

Following the announcement, Karicare, one of the best-selling New Zealand milk powder brands in China, is among the companies that have raised prices.

"We have raised the price of our products by an average of 20 yuan ($3.16) per tin starting from October 1," a member of staff at Nutricia New Zealand Ltd, producer of the Karicare formula range, told the Global Times Thursday.

"Global oil prices are rising, driving up logistics and transport costs," the staff member explained.

"The action (by New Zealand) is based on two motives: to protect the interests of its lawful exports (of dairy products) and to ensure the competitiveness of its dairy products by effectively managing export channels," said Wang Dingmian, a dairy expert.

Wang said he did not believe that authorities in the US and Japan would follow suit.

China imported a total of 528,000 tons of milk powder in 2011, official statistics showed. Imported milk powder accounts for roughly 20 to 25 percent of China's milk powder consumption, and some 70 percent of the imports are from New Zealand, Wang said.

After New Zealand announced its clampdown on unlawful exports, some agents for some of the country's popular milk powder brands on warned that prices may go up by 30 to 50 yuan per tin because supplies of these brands will fall.

"Retailing prices of other brands are likely to go up, in view of climbing domestic demand but may not be a result of the action by New Zealand," Beijing Orient's Chen said.


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