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A false hope that China was returning to the dairy markets

World hopes that China is going to start importing more dairy products have been dashed by the USDA’s October report.  The collapse of global dairy prices was triggered when China pulled-back on purchases nearly two years ago. 

The USDA numbers for September showed year-over-year increases in Chinese purchases of skim milk powder and whole milk powder prompting hope Beijing was returning to the global market.  Traditionally Chinese purchases increase from September to October.   

But that is not the case this year; Chinese whole milk powder purchases in October totaled 11,500 metric tons down 16 percent from September and 25 percent below a year ago.  

Skim milk powder purchases totaled 7,900 metric tons down 59 percent from September and down 50 percent compared to October of 2014.  This is the lowest October whole milk powder import number since 2011 and the lowest skim milk powder imports since 2012. 

The U.S. share of the Chinese skim milk powder business plunged 65 percent from a year ago. 

On the positive side: Chinese whey product imports were up more than 10 percent from a year ago at 34,000 metric tons and the U.S. has more than half of that business.