China's dairy industry getting over tainted milk scandal

The Chinese dairy industry was hit hard by the tainted milk scandal last year, resulting in a sluggish market, excess raw milk, and low prices. However, the situation is turning around in the second half of 2009 with higher milk prices and less excess dairy products. Chinese dairy farmers are bracing themselves for a market boom and keen to expand their businesses.

"The worst period has passed," said Man Yuejiang, a dairy farmer in Ningxia Hui Autonomous Region who expanded the number of cows from 150 to 500, adding that the raw milk price has now bounced back to 2.60 yuan per liter

The Chinese government is encouraging dairy farmers to expand their businesses with subsidies. The Chinese dairy industry is expected to see a real turning point in September.

The focus on the raw milk quality is a tribute to the recovery of Chinese dairy industry. After the melamine scandal, the Chinese government has taken a series of measures to regulate and standardize Chinese dairy industry to ensure that the dairy source quality is safe for processing, and that manufacturing is stringently checked for quality.

The quality of milk is improved with these efforts, and the consumer confidence is coming back.

For years, too many organizations were responsible for the supervision of the dairy sector. As a result, nobody knew what their duties were and there were many loopholes with the management system. The crisis compelled those in the industry to rethink and coordinate quality supervision.

With efforts from the many players, the Chinese dairy industry is walking out of its shadow. Dairy consumption is up from 50 percent to 70 percent currently, and is expected to achieve 90 percent at the end of 2009, according to China’s Ministry of Industry and Information.
 

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