Cheese exports to China rapidly rising

NEW ZEALAND and Australia, as well as the United States, are reaping the benefits of China’s new-found love for cheese.

The Chinese palate is growing accustomed to processed cheese from these countries. Likewise, cream cheese for home baking is also in high demand, according to Zhuang Jiacai, dairy industry analyst at the Chinese market research firm CCM.

Shipments had gone up 47% year-on-year during the first 10 months of 2014, reported CCM^[1]. From January to October 2014, the country imported about 56,028 tonnes of cheese, as compared to 47,316 tonnes during the entire 2013.

The staggering growth is expected to continue as Chinese consumers become more affluent and cosmopolitan. Baidu.com – China’s most popular Internet search engine – has reported a 59.8% increase in searches for the word ‘cheese’ in the last three years,^[2] and the appeal of pizza, baked sweet potato with cheese and baked broccoli with cheese is catching on.

Leading exporters to China 

China sources most of its cheese from New Zealand. Between January and October 2014, imports amounted to a total of 24,013 tonnes, an increase of 44% over the same period in 2013.

But Australia is trailing quite fast as export figures show a growth of 78% y-o-y to 15,189 tonnes. Analysts say that shipments will further increase this year as both countries have just signed the China-Australia Free Trade Agreement.

The United States witnessed a rise of 27% y-o-y to 10,084 tonnes of cheese destined to China. But it is way far behind New Zealand and Australia. New Zealand now exports more than twice as much cheese to China as the US, and the gap between Australia and the US has widened from 593 tonnes in 2013 to 5,105 tonnes in 2014.

Even as Europe has amongst the best cheeses in the world, the region is a small player in China. However, imports from France, Italy, Denmark, Germany, and the Netherlands also improved, all rising by about 25% y-o-y. Their total volume of imports added up to 4,696 tonnes, or less than one-fifth of the amount imported from New Zealand. This may continue to increase as the Asian giant develops a true liking for higher-value cheese.

China is currently importing cheese from the US, New Zealand and Australia at an average of 4.71 USD/kg, 5.10 USD/kg and 4.69 USD/kg respectively, as opposed to 8.14 USD/kg from France, 8.27 USD/kg from Italy, and 8.51 USD/kg from Denmark, which suggests that European suppliers are currently focusing on retail products.

It also helps that U.S. and Australasian suppliers hold strategic advantages over their European competitors, including New Zealand’s (and from 2015, Australia’s) superior market access due to its Free Trade Agreement with China, and lower freight costs for New Zealand, Australian, and West Coast US suppliers.

[1] All data related to imports of cheese into China were provided by China Customs.

Source: China Customs (1 tonne = 1,000 kg)

[2] Data provided by Baidu.com

Source: Baidu.com