Following three consecutive years of decline, the downward trend of China’s dairy imports has reversed in 2025. Chinese dairy imports rebounded in Q1 2025, rising 13% year-on-year (Y-O-Y) in milk equivalent terms, before slowing to just +1% in Q2. The moderation was driven largely by a sharp drop in US-sourced Sweet Whey Powder (SWP) and lactose, following escalating trade tensions that culminated in a US–China tariff reduction agreement in May.
New Zealand has capitalized on this growth thanks to its zero-tariff access under the NZ-China Free Trade Agreement, effective since January 2024. This trade agreement has given New Zealand exporters a clear pricing advantage, particularly relevant amid robust demand and constrained domestic milk production in China. The EU also posted a partial recovery after a weak 2024, while Turkey, Argentina and Uruguay contributed positively. Performance from Australia and Belarus was mixed.
The Skim Milk Powder (SMP) category was the main growth contributor by volume, with 140,170 tonnes imported in H1 2025, up 6% y-o-y. The New Zealand was the main supplier, representing 77% of total Chinese SWP imports, followed by the EU, whose sales saw a slight increase in volume but lost significant market share to 9% in 2025. Meanwhile, SWP Imports dropped sharply in June, down 27% Y-O-Y, due to a 61% decline from the US. The decrease in SWP imports was probably because of China’s buyers accelerated purchases ahead of the uplift in import tariffs to avoid additional costs. However, H1 overall showed solid growth, up 14% Y-O-Y, driven by the EU and Turkey.
As of now, the interesting thing to see is how trade flow dynamics are going to be. It seems that China’s buyers have reduced their reliance on US SWP and searching for alternative sources.
Written by Jose Saiz
