Chinese Dairy Imports Report

Chinese Dairy Imports Report

Wednesday, 03 January 2018

Chinese Dairy Imports November - Powders Imports Up, Fats Generally Weaker Imports of powders to China saw decent gains in November with WMP, SMP and IMF all seeing y/y increases. Butter and cheese imports were down y/y in November while AMF imports saw decent increases. WMP: Chinese WMP imports remained ahead of last year in November, up 2% y/y, recording the largest volume of WMP imported by China in November since 2013. YTD WMP imports are up 16% on last year at 443,528 tonnes. Imports from New Zealand accounted for 90% of the November volume, down 0.8% y/y to 27,695 tonnes while NZ account for 93% of the YTD volume. SMP: SMP saw very strong imports in November up 53% on the 2016 level posting a new three year high for the month. NZ accounted for 9,415 tonnes or 52% of the total volume. The US accounted for 15% of the SMP imported, while Australia and Germany were responsible for 10% and 7% respectively. YTD SMP imports are now up almost 36% on the same point last year. Infant Milk Formula: IMF imports followed a similar trend to SMP, with November up 47% y/y posting IMF’s single biggest month ever, and by a considerable margin, beating the previous monthly record of 28,911 tonnes posted in September. The Netherlands was again the leading origin of the IMF imported, accounting for 29% of the November total. NZ was the second largest origin with 20% while France and Ireland accounted for 16% and 9% respectively. YTD imports now stand 36% ahead of last year. Butter and AMF: Combined butter and AMF imports dropped off sharply in November, down 12% y/y. This puts combined YTD butter and AMF imports down 12% y/y. Butter imports decreased in November driving the overall reduction in fat imports, totalling 2,698 tonnes, down 36% on last year. NZ accounted for 79% of the November butter imports. YTD butter imports are now up 5% y/y. AMF imports on the other hand increased sharply in November albeit off a low base, up 38% y/y. YTD imports are now 38% ahead of the same point last year. Cheese: Cheese imports saw their biggest y/y decline of 2017 in November, down 22% y/y although it is worth noting that cheese imports to China were exceptionally strong in November 2016, which is exaggerating the percentage decrease somewhat. YTD imports remain 14% ahead of last year. New Zealand was the leading origin of cheese imports accounting for 43% of the November cheese imports. Whey: Whey powder and WPC imports maintained their positive ways in November, up 3% y/y. Whey imports also exceeded the three year average for the month by almost 29%. YTD whey imports now total 480,085 tonnes with the US accounting for 55% of the YTD total.

Chinese Dairy Imports By Product Source: GTT

Nov Product WMP SMP Infant Formula Butter & AMF Butter AMF Cheese Whey Powder/WPC Lactose Pharma Caseinates

Metric Tonnes 2016 2017 30,109 30,749 11,942 18,248 23,943 35,099 6,328 5,586 4,236 2,698 2,092 2,888 10,968 8,524 45,372 46,634 5,780 5,982 1,200 1,318


Chinese Dairy Imports YTD Metric Tonnes Y/Y % Diff % Diff. 3 Yr. Avg. 2016 2.1% 11.6% 381,992 52.8% 46.0% 173,097 46.6% 100.4% 197,995 -11.7% -2.6% 75,353 -36.3% -32.8% 58,231 38.1% 67.8% 17,126 -22.3% 10.3% 89,337 2.8% 28.9% 455,585 3.5% 4.7% 70,202 9.9% 10.8% 14,917

2017 Cumul. Y/Y Diff. 443,528 16.1% 235,199 35.9% 269,583 36.2% 84,663 12.4% 61,121 5.0% 23,546 37.5% 101,717 13.9% 480,085 5.4% 70,589 0.6% 12,497 -16.2% Page 1

Chinese Dairy Imports Report WMP Import Charts Source: GTT

Chinese WMP Imports (Metric Tonnes)

140,000 120,000

108,126

Metric Tonnes

100,000 80,000 53,974

60,000

40,150 33,072

40,000

30,547

35,402

42,327

26,437

30,749 22,935

19,810

20,000 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

2016

Aug

Sep

Oct

Nov

Dec

2017

Cumulative Chinese WMP Imports (kt) and % Change 500 370

400

413

120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20%

444

335 294

300

kt

393

200

162

195

226

252

108 100 0 -100 -200

4.1% -10.0% Jan

Source: GTT

Feb

-3.8%

-2.9%

-4.8%

Mar

Apr

May

2016 Cumul.

1.0%

5.8%

10.5%

Jun

Jul

Aug

2017 Cumul.

15.0%

17.3%

16.1%

Sep

Oct

Nov

Dec

TY vs LY Cumul.

Monthly Chinese WMP Import Origins (t)

New Zealand 27,695 90%

Nov Monthly Total 30,749 t

Uni ted States 1,059 3% Aus tralia 799 3% Other 1,195 4%

Source: GTT

YTD Chinese WMP Import Origins (t)


YTD Total 443,528 t

Aus tralia 8,897 2% Fra nce 7,541 2% Other 13,274 3%

Source: GTT


Page 2

Chinese Dairy Imports Report SMP Import Charts Source: GTT

Chinese SMP Imports (Metric Tonnes)

40,000 35,000

32,813

30,000

26,255

Metric Tonnes

25,000

26,122

21,260

20,270

18,522

17,857

20,000

21,577

16,367

18,248 15,909

15,000 10,000 5,000 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

2016

Aug

Sep

Oct

Nov

Dec

2017

Cumulative Chinese SMP Imports (kt) and % Change 230 180

217

235

32.2%

34.6%

35.9%

Sep

Oct

Nov

201

185

159

140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10%

132 130

111

kt

92 74

80

53 33

30 -20 -70 -120

2.7%

Feb

Mar

11.8%

16.2%

Apr

May

Jun

29.2% 24.9%

-2.0% Jan

Source: GTT

4.2%

7.6%

2016 Cumul.

Jul

Aug

2017 Cumul.

Dec

TY vs LY Cumul.

Monthly Chinese SMP Import Origins (t) Uni ted States 2,666 15%


Aus tralia 1,777 10% Germa ny 1,245 7%


Fra nce 928 5% Other 1,477 8%

Fi nland 740 4%

Source: GTT

YTD Chinese SMP Import Origins (t)

Aus tralia 29,848 13%

Uni ted States 25,014 Germa ny 10% 22,677 10%

Fi nland 9,079 4%

YTD Total 235,199 t


Fra nce 11,947 5%

Other 23,996 10%

Source: GTT


Page 3

Chinese Dairy Imports Report Infant Formula Import Charts Source: GTT

Chinese Infant Formula Imports (Metric Tonnes)

40,000 35,099 35,000 28,911

30,000 26,064 25,000

Metric Tonnes

23,318

22,967

20,000

15,519

24,539

28,119

28,357

21,097

15,592

15,000 10,000 5,000 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

Aug

2016

Sep

Oct

Nov

Dec

2017

Cumulative Chinese Infant Formula Imports (kt) and % Change 300

180% 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10%

270

250

234

206 200

177 149

150

kt

125 98

100 50

75 54 16

31

0 -50

10.5%

18.7%

22.6%

25.8%

29.4%

Mar

Apr

May

Jun

27.8%

30.0%

33.0%

34.7%

36.2%

Jul

Aug

Sep

Oct

Nov

-8.1%

-100 Jan Source: GTT

Feb

2016 Cumul.

2017 Cumul.

Dec

TY vs LY Cumul.

Monthly Chinese Infant Formula Import Origins (t) Ireland Denmark 2,952 Germa ny 3,030 8% 2,699 9% 8% Fra nce 5,539 16%

Other 3,860 11%



Netherlands 10,008 28%

Source: GTT

YTD Chinese Infant Formula Import Origins (t)


Fra nce 36,602 13%

Ireland 33,942 13%

YTD Total 269,583 t Netherlands 80,654 30%

Germa ny 25,949 10%

Other 48,635 18%

Source: GTT


Page 4

Chinese Dairy Imports Report Butter Import Charts Source: GTT

Chinese Butter Imports (Metric Tonnes)

14,000 12,269 12,000

Metric Tonnes

10,000

8,664

8,000 6,225

5,751

6,000

6,505

5,705

4,688

4,265 4,000

3,029

2,698

1,323

2,000 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

2016

Aug

Sep

Oct

Nov

Dec

2017

Cumulative Chinese Butter Imports (kt) and % Change 70

1.3%

14.0%

7.8%

8.2%

5.0%

Jul

Aug

Sep

Oct

Nov

42

kt

40

36 30

30 20

14

19

23

9

0 2.0%

-10 -20

-29.9%

-23.2%

-20.9%

Jan

Feb

Mar

-30

Source: GTT

180% 170% 160% 150% 140% 130% 120% 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% -40%

61

54

50

10

58

55

60

-14.0% Apr

-3.0%

May

2016 Cumul.

Jun

2017 Cumul.

Dec

TY vs LY Cumul.

Monthly Chinese Butter Import Origins (t)



Fra nce 250 9%

Other 211 8%

Netherlands 94 4%

Source: GTT

YTD Chinese Butter Import Origins (t)

Fra nce 5,268 9% New Zealand 50,996 83%

YTD Total 61,121 t

Aus tralia 1,891 3% Bel gium 1,409 2% Other 1,555 3%

Source: GTT


Page 5

Chinese Dairy Imports Report AMF Import Charts Source: GTT

Chinese AMF Imports (Metric Tonnes)

5,000 4,500 4,000 3,500 2,885

Metric Tonnes

3,000

2,423

2,749

2,365

2,500

2,021

1,807

2,000

2,888 2,526

1,592

1,405

1,500 888

1,000 500 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

2016

Aug

Sep

Oct

Nov

Dec

2017

Cumulative CumulativeChinese ChineseButter AMF Imports Imports(kt) (kt)and and%%Change Change 70 25 60 20

54 17

kt

50 15 40

10 0

2 9

3 14

7 23

5 19

14.0%

19.9%

-14.8% -1.2% -29.9%

-23.2%

-20.9%

Jan

Feb

Mar

-30 -15

Source: GTT

61 24

180% 170% 160% 150% 150% 140% 140% 130% 130% 120% 120% 110% 110% 100% 100% 90% 90% 80% 70% 80% 60% 70% 50% 60% 40% 50% 30% 40% 20% 30% 10% 20% 0% 10% -10% 0% -20% -10% -30% -40% -20%

36 11

0 -5 -10 -10 -20

21 58

14 42

10 30 205

19 55

-14.0% Apr

30 9

25.7%

26.1% 2.0%

28.0% 1.3%

37.4% 14.0%

45.1% 7.8%

37.4% 8.2%

37.5% 5.0%

Jul

Aug

Sep

Oct

Nov

-3.0%

May

2016 Cumul.

Jun

2017 Cumul.

Dec

TY vs LY Cumul.

Monthly Chinese AMF Import Origins (t)



Fra nce 45 1% Other 83 3%

Source: GTT

YTD Chinese AMF Import Origins (t)


YTD Total 23,546 t

Bel gium 795 3% Netherlands 771 3% Other 439 2%

Source: GTT


Page 6

Chinese Dairy Imports Report Cheese Import Charts Source: GTT

Chinese Cheese Imports (Metric Tonnes)

14,000 12,261

11,613

12,000 9,663

10,184

9,555

10,000

8,914

8,750

Metric Tonnes

8,067

8,405

8,524

8,000 5,779

6,000 4,000 2,000 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

Aug

2016

Sep

Oct

Nov

Dec

2017

Cumulative Imports (kt) (kt) and and % % Change Change Cumulative Chinese Chinese Cheese Butter Imports 70 110 60

54

90 50

kt

70 40 30 50 20 30 10 10 0 -10 -10 -30 -20 -50 -30

Source: GTT

9 10

14 19

14.5%

19 28

16.9%

-29.9% -1.2%

-23.2%

-20.9%

Jan

Feb

Mar

23 36

18.3% -14.0% Apr

30 46

23.8%

36 59

28.7% 2.0%

79

42 67

1.3% 20.8%

14.0% 23.4%

Jul

Aug

58 93

55 85

7.8% 20.4%

8.2% 18.9%

Sep

Oct

180% 170% 160% 160% 150% 150% 140% 140% 130% 130% 120% 120% 110% 100% 110% 90% 100% 80% 90% 70% 80% 60% 70% 50% 60% 40% 30% 50% 20% 40% 10% 30% 0% 20% -10% 10% -20% 0% -30% -10% -40%

61 102

5.0% 13.9%

-3.0%

May

Jun

2016 Cumul.

2017 Cumul.

Nov

Dec

TY vs LY Cumul.

Monthly Chinese Cheese Import Origins (t) Aus tralia 1,714 20%



Uni ted States 1,632 19%

Other 1,226 15%

Fra nce 241 3%

Source: GTT

YTD Chinese Cheese Import Origins (t) Aus tralia 19,662 19%


YTD Total 101,717 t


Other 16,707 17% Source: GTT


Page 7

Chinese Dairy Imports Report Whey Powder Import Charts Source: GTT

Chinese Whey Powder Imports (Metric Tonnes)

60,000

54,875 47,312

50,000

46,555

Metric Tonnes

40,000

44,914

42,801

41,172

40,455

46,634 43,019 37,993

34,355

30,000 20,000 10,000 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

Aug

2016

Sep

Oct

Nov

Dec

2017

Cumulative Cumulative Chinese Chinese Whey Butter Powder Imports Imports (kt) (kt) andand % Change % Change 600 70 60 500

54

kt

50 400 40 300 30 200 20 100 10 0 0

9 34

-100 -10 -200 -20 -300 -30

Source: GTT

14 75

19 122

9.1%

10.5%

-29.9% -21.6%

-23.2%

-20.9%

Jan

Feb

Mar

23 163

13.7% -14.0% Apr

30 206

10.6%

395

180% 170% 160% 150% 140% 130% 130% 120% 120% 110% 110% 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% -10% -10% -20% -20% -30% -40% -30%

61 480

42 308

352

11.0% 1.3%

14.0% 8.1%

7.8% 6.0%

8.2% 5.7%

5.0% 5.4%

Jul

Aug

Sep

Oct

Nov

36 261

13.3% 2.0%

58 433

55

-3.0%

May

2016 Cumul.

Jun

2017 Cumul.

Dec

TY vs LY Cumul.

Monthly Chinese Whey Powder Import Origins (t) Fra nce 5,835 12%


Netherlands 4,553 10%


Pol a nd 3,564 8% Other 8,551 18%

Source: GTT

YTD Chinese Whey Powder Import Origins (t) Fra nce 56,271 12%


Netherlands 37,215 8% Pol a nd 27,344 6%

YTD Total 480,085 t

Other 59,843 13%

Ireland 16,208 3% Germa ny 15,007 3%

Source: GTT


Page 8

Chinese Dairy Imports Report Lactose Import Charts Source: GTT

Chinese Lactose Imports (Metric Tonnes)

10,000 8,490

9,000 7,758

8,000

7,114

6,465

7,000

6,180

6,037

Metric Tonnes

6,000

5,807

6,178

5,982

5,304

5,275

5,000 4,000 3,000 2,000 1,000 Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

2016

Aug

Sep

Oct

Nov

Dec

2017

Cumulative CumulativeChinese ChineseLactose Butter Imports Imports(kt) (kt)and and% %Change Change 70 80 60 70

54

50 60

kt

40 50 30 40 20 30 10 20 100

14 9

19

30 36

2.0%

1.3%

14.0%

7.8%

8.2%

5.0%

3.2%

0.7%

0.6%

1.0%

0.3%

0.6%

Jul

Aug

Sep

Oct

Nov

20

6

13.0% -29.9%

-30 -20 Jan Source: GTT

53

13

-10 0 -20 -10

23 29

42 47

36 42

200% 180% 170% 190% 160% 180% 150% 170% 140% 160% 130% 150% 120% 140% 110% 130% 100% 120% 90% 110% 80% 100% 70% 90% 60% 80% 50% 70% 40% 60% 30% 50% 20% 40% 10% 30% 0% 20% -10% 10% -20% 0% -30% -40% -10%

61 71

58 65

55 59

14.2% -23.2% Feb

15.1%

9.5% -14.0% -20.9% Mar

Apr

10.1% -3.0%

May

2016 Cumul.

Jun

2017 Cumul.

Dec

TY vs LY Cumul.

Monthly Monthly Chinese Chinese Whey Lactose Powder Import Import Origins Origins (t) (t) Fra nce 5,835 12%

Uni ted States 5,546 Uni ted States 93% 23,967 52%

Nov Nov Monthly Monthly Total Total 46,634 5,982 tt

Netherlands 4,553 Germa ny 10% 185 3% Pol a nd Netherlands 3,564 140 8% Other 2% 111 Other 2% 8,551 18%

Source: GTT

YTD Chinese Lactose Import Origins (t)

Germa ny 5,709 8% Uni ted States 55,321 78%

YTD Total 59,332 t Other 4,300 6%

Pol a nd 3,177 5% Netherlands 2,082 3%

Source: GTT


Page 9

Chinese Dairy Imports Report Caseinate Import Charts Source: GTT

Chinese Caseinate Imports (Metric Tonnes)

2,500 1,992

2,000 1,465

Metric Tonnes

1,500

1,318

1,238 953

884

1,000

1,147 1,018

942

884

654 500

Jan

Feb

Mar

Apr

May

2013

Jun

2014

Jul

2015

Aug

2016

Sep

Oct

Nov

Dec

2017

Cumulative Cumulative Chinese Chinese Caseinate Butter Imports Imports(kt) (kt)and and%%Change Change 70 20

kt

60 15 50

54 42

40 10 30

36 30

205 10 0 0 -10 -5 -20 -30 -10

9 1

19 2

-29.9% -46.7% -70.4% -23.2% Feb

12

11

5

3

-37.5% -38.0% -14.0% -20.9% Mar

9

8

10

200% 180% 170% 180% 160% 150% 160% 140% 140% 130% 120% 120% 110% 100% 90% 80% 80% 70% 60% 60% 40% 50% 40% 20% 30% 0% 20% 10% -20% 0% -40% -10% -20% -60% -30% -40% -80%

61

58

7

2.0% -17.6%

Jan Source: GTT

14 2

23

55

Apr

-29.5% -3.0%

May

1.3% -15.5%

14.0%

7.8%

8.2%

5.0%

-19.0%

-17.8%

-18.5%

-16.2%

Jul

Aug

Sep

Oct

Nov

Jun

2016 Cumul.

2017 Cumul.

Dec

TY vs LY Cumul.

Monthly Chinese Caseinate Import Origins (t)(t) Monthly Chinese Whey Powder Import Origins Netherlands 287 22%


Fra nce Fra nce 5,835 12% 90 7%

Other 8,551 18%

New Zealand 783 59%

Source: GTT

Netherlands Other 4,553 158 10% 12% Pol a nd 3,564 8%

Nov Nov Monthly Monthly Total Total 1,318 tt 46,634

YTD Chinese Caseinate Import Origins (t) Netherlands 3,500 28%


Source: GTT


YTD Total 12,497 t

Fra nce 963 8% Uni ted States 643 5% Other 527 4%

Page 10

About INTL FCStone INTL FCStone's customers include the producers, processors and end users of virtually every major traded commodity; commercial counter-parties; governmental, non-governmental and charitable organizations; institutional investors; brokers; professional traders; commercial banks; and major investment banks. Among our services are the proprietary Integrated Risk Management Program (IRMP), as well as exchange and OTC execution and clearing services, designed to limit risk and enhance margins and bottom-line results; physical trading in base metals, precious metals and grains; a global foreign exchange and currency payment service; asset management; equities market-making; securities execution and trading; and investment banking advisory services.

www.intlfcstone.com

INTL FCStone Ltd. Dairy Contact Details European Office: +353 1 634 9140 Charlie Hyland:

[email protected]

Liam Fenton:

[email protected]

John Lancaster:

[email protected]

Dr Peter Meehan:

[email protected]

Disclaimer: INTL FCStone Ltd (“IFL”). Branch registered in Ireland No. 907174. Registered in England and Wales Company No. 5616586. Authorised and regulated by the UK Financial Conduct Authority [FRN: 446717]. In Ireland, the activities of INTL FCStone Ltd are subject to the supervision of conduct of business rules by the Central Bank of Ireland. IFL is a wholly owned subsidiary of INTL FCStone Inc. [NASDAQ: INTL]. This material should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Ltd. or its affiliates. Neither this information, nor any opinion expressed, constitutes a solicitation to buy or sell futures, options on futures contracts, or OTC products. INTL FCStone Inc. provides financial services worldwide through its subsidiaries in accordance with applicable law in the jurisdictions where services are provided. INTL FCStone Markets, LLC (“IFM”), is a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. References to and discussions of Structured over-the counter (“OTC”) products or swaps are made solely on behalf of IFM. References to exchange-traded futures and options are made on behalf of the IFL. The trading of derivatives such as futures, options, and OTC products or “swaps” may not be suitable for all investors. Derivatives trading involves substantial risk of loss, and you should fully understand those risks prior to trading. Past performance may not be a reliable guide to future performance. Mention of specific commodities should not be taken as a recommendation to buy or sell these commodities. The information and data provided herein is not tradable and is for indication-only purposes. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to accuracy. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. © 2018 INTL FCStone Ltd. Reproduction without authorisation is forbidden. All Rights Reserved.


Page 11