NZ milk import quota depleted within a month

Chinese importers have used up the import quota of New Zealand dairy products for 2013, and further imports will be levied in accordance with the Most Favored Nations (MFN) tax rate, CBN Daily reported.

Milk powder from New Zealand experienced the dicyandiamide scandal early this January and now the New Zealand major milk producing area is suffering from drought, causing concerns about rising costs. But from the current market situation, these events do not shake domestic consumer confidence in New Zealand milk products.

The General Administration of Customs released the No 4 announcement on Jan 28, saying that imports of solid and concentrated non-solid dairy product (mostly referring to milk powder) had reached 75,367.401 tons, exceeding the triggered standard of special safeguard measures of 71,060.895 tons. So since Jan 29, these agricultural products have been charged an import tariff according to MFN tax rates.

Since the implementation of the special safeguard measures for New Zealand's dairy products, the trigger date of the import standard of China's import of New Zealand milk products has been moved more and more forward. The trigger date was Aug 13 in 2009, April 22 in 2010, Mar 9 in 2011, Feb 22 in 2012 and now it is the end of Jan this year.

Industrial data shows that 80 percent of imported milk powder is from New Zealand. Due to the deceasing quality of domestic dairy products, many dairy companies have gone to New Zealand for milk sourcing and scrambled to book their import quotas, a direct result of imported milk powder reaching the standard limits earlier and earlier, Wang Dingmian, a dairy industry expert said.

Will the levied milk powder lead to an increase in the retail price? Wang explained that the price of the current supply of milk powder on the market was agreed on by importers and suppliers half a year ago so it will not affect the dairy market. As for the impact on the terminal market, there are still a few months to go.

What is more, the retail price of milk powder is mainly decided by the cost of the domestic circulation, as well as the pursuit of profits determined by producers based on market conditions. The tariff only plays a small role in it, Wang said.