No price rise in milk powder imports

Consumers are unlikely to be hit by a price rise in imported milk formula this year even after eight European Union countries were fined for exceeding milk production quotas because the overall global supply has increased, experts said.

Retailers in Shanghai have been cutting prices of imported milk formulas this year but speculation was rife that prices may rise soon as the huge fines imposed by the European Commission on the eight EU members for overproduction may cut the supply.

"The fine will not have any impact on the prices of imported milk powders in the domestic market as the European Union is not the major supplier for the Chinese market," Wang Dingmian, an expert on dairy products, told news website thepaper.cn. Wang expects the current price cutting to continue to the end of this year.

A surge in imports helps keep the price low, industry watchers said. In the first half of the year, China's milk formula imports surged 75 percent from the same period of last year to 680,000 tons, a historical high.

The European Commission said earlier this month that Germany, the Netherlands, Poland, Denmark, Austria, Ireland, Cyprus and Luxembourg will be fined 409 million euros (US$519 million) for exceeding their milk quotas in the year ended on March 31 by over 1.48 million tons.

The EU milk quota system will be abolished on April 1, 2015, and its end will see an influx of European suppliers, adding to the current producers from the US and New Zealand, said Wang Weimin, secretary-general of the Western China Dairy Industry Development Association.