Modified One-Child Policy To Boost Milk Demand

Recent news that China will relax its decades-old one-child policy will very likely lead to an increase in demand for milk formula within the country.

On November 15, the Communist Party announced that it would allow married couples to have a second child if one of the parents is an only child. As a result, our Country Risk team is currently in the process of revising its demographic forecast for China, which will, in turn, affect demand for varieties of infant milk. Prior to the adoption of China's one-child policy, the fertility rate stood at 2.63 in 1980, having already fallen from a high of 5.91 in the mid-1960s. Currently, the fertility rate in China stands at just under 1.6, as some exceptions to the rule already exist. As the policy is further relaxed, the birth rate within China is expected to jump, fuelling demand for infant milk products.

We are bullish on the Chinese dairy sector, as it remains one of the fastest growing sub-sectors in China's food industry. Production of dairy products, especially milk and whole milk powder, has increased rapidly in recent years, fuelled by rising disposable incomes, increased urbanisation, improved affordability of domestic cold storage facilities and improved awareness of the health benefits of dairy products. However, the domestic preference for safe, reliable products is also supporting strong imports.

News Well Received
Rebased Share Price Of Selected Companies (1/11/2013=100)

or Register now for free to read the full article

This article is tagged to:
Sector: Food & Drink
Geography: China

Access all of our latest analysis, data and forecasts - request a trial