Chinese WMP Stocks Update – Jul ’15
According to the USDA semi-annual report on Chinese dairy products, a sharp upward revision in 2015 beginning whole milk powder (WMP) stocks has been a significant contributing factor to the declines in Chinese WMP imports exhibited throughout the first half of the year. Current estimated beginning WMP stocks for 2015 of 300,000 MT were nearly double the previous estimate and significantly higher than historical levels. The greater than expected carryover stocks also resulted in a significant downward revision to estimated 2015 Chinese WMP imports. The reduction in imports is expected to draw down stocks to more normal levels throughout the rest of the year and into 2016. USDA revised 2015 Chinese WMP imports downward by a third, from 600,000 MT in its previous estimate to 400,000 MT in the most current revision. The revised figure results in a 41.2% YOY decline in Chinese WMP imports. According to GTIS data, through the first half of the year Chinese WMP imports have declined by 55.6% YOY. Translating forward the YOY percentage decline throughout the second half of the year would result in 2015 annual Chinese WMP imports of approximately 297,000 MT, over 100,000 MT lower than the revised USDA figure. Annual Chinese WMP import figures from USDA FAS have been fairly consistent with GTIS data historically, as shown below.