Chinese dairy imports weaken in July

July was a particularly weak month, with only three out of 15 commodities recording gains. Notable volume declines were observed in SMP, WMP, and whey. Butter delivered an exceptional result, with imports rising by 13.42% compared with the previous year. Other fat-based products remained subdued, while the declines in liquids were particularly severe.July concluded with a 33.74% year-on-year decrease in imports, equivalent to 499 million kilo LME, compared with growth of 12.82% in June. July ’26 recorded the largest monthly decline in imports since January 2023. Chinese dairy imports - July Commodity 2025 2026 ∆ ∆% SMP 13,829 11,189 -2,640 -19.09% WMP 37,584 19,489 -18,095 -48.15% Whey 68,654 47,639 -21,015 -30.61% WPC80/WPI's 4,230 2,869 -1,361 -32.17% Casein 1,678 2,434 756 45.05% Caseinates 1,551 1,900 349 22.50% Lactose 21,233 8,812 -12,421 -58.50% I/F 20,636 18,086 -2,550 -12.36% Cheese 19,088 10,801 -8,287 -43.41% Butter 8,078 9,162 1,084 13.42% AMF 4,697 2,569 -2,128 -45.31% Cream 22,446 12,945 -9,501 -42.33% Yoghurt 1,465 491 -974 -66.48% Condensed 1,060 786 -274 -25.85% Milk 32,275 27,063 -5,212 -16.15% The cumulative performance through July has returned to negative territory. Meanwhile, certain commodity segments, including SMP, lactose, and yoghurt & milk, have lagged expectations and recorded double-digit declines. Chinese dairy imports - YTD July Commodity 2025 2026 ∆ ∆% SMP 154,000 123,179 -30,821 -20.01% WMP 291,573 300,784 9,211 3.16% Whey 396,686 367,742 -28,944 -7.30% WPC80/WPI's 21,765 20,145 -1,620 -7.44% Casein 10,093 13,688 3,595 35.62% Caseinates 13,849 13,375 -474 -3.42% Lactose 104,255 74,086 -30,169 -28.94% I/F 126,009 124,096 -1,913 -1.52% Cheese 116,520 132,380 15,860 13.61% Butter 67,028 75,190 8,162 12.18% AMF 27,772 27,005 -767 -2.76% Cream 163,064 165,404 2,340 1.44% Yoghurt 8,684 5,815 -2,869 -33.04% Condensed 7,747 9,356 1,609 20.77% Milk 217,569 199,868 -17,701 -8.14% Overall, YTD July imports recorded a year-on-year decrease of 4.98%, equivalent to 491 million kilo LME, compared with growth of 0.10%, or 219 million kilo LME, in June.The pace of decline began to ease during the July–October ’25 period, and by November and December ’25, early signs of a shift in momentum had started to emerge. This positive reversal was confirmed during the first half of 2026, from January through June. However, the broader monthly pattern remained volatile, with periods of growth alternating with renewed declines. June marked the fourth month of year-on-year import growth in 2026, but July broke this trend and returned to negative territory.Economic conditions in China remain mixed. The labour market continues to be weighed down by persistently high unemployment. Inflation, meanwhile, has shown considerable volatility. After trending downward from August, inflation briefly increased in January before moving into negative territory from February through May. It subsequently returned to positive territory, although the monthly pattern remained uneven. More recently, inflation reached 1% in March, 1.2% in both April and May, 1% in June, and 0.5% in July.In addition to broader economic challenges, low domestic farmgate milk prices continue to weigh on the market. Farmgate prices in July ’26 reached CNY 304 per 100 kilo, equivalent to EUR 39.25 per 100 kilo.Surplus milk production is likely to translate into increased export activity over time, and the initial stages of this trend were already becoming visible in the 2025 export data. YTD July ’26 figures, however, have turned negative. Export growth moved from +138%, equivalent to 404 million kilo LME, in December 2025 to -16.24%, or -59 million kilo LME, YTD July. Chinese dairy exports - YTD July Commodity 2025 2026 ∆ ∆% SMP 6,236 12,107 5,871 94.15% WMP 29,860 15,792 -14,068 -47.11% Whey 592 1,175 583 98.48% Casein 59 148 89 150.85% Caseinates 77 302 225 292.21% WPC90/WPI 2 37 35 1750.00% Lactose 444 884 440 99.10% I/F 4,284 4,814 530 12.37% Cheese 947 839 -108 -11.40% Butter 5,088 1,061 -4,027 -79.15% AMF 764 1,756 992 129.84% Yoghurt 2,727 2,392 -335 -12.28% Cream 63 106 43 68.25% Fermented 2,422 2,655 233 9.62% Condensed 806 1,405 599 74.32% Milk 20,081 25,384 5,303 26.41% Shipments below 600 tons are most likely return consignments, while volumes exceeding this threshold could provide an early indication of China’s potential shift towards becoming both a dairy importer and exporter. Although export volumes remain below 2025 levels, performance across individual product categories has remained noteworthy. SMP exports surged by 94.15%, while liquids also recorded impressive gains. Although it remains early to draw firm conclusions, export performance over the past year suggests that SMP, I/F, butter, and liquids could position China as an increasingly relevant dairy exporter.