Growth of Raw Milk Price Slowed in December 2019

As per MOA monitoring data, raw milk price kept on surging for eight months from May to December 2019.
Raw milk price averaged at 3.83 yuan/kg in December, up 0.01 yuan/kg MOM, or up 0.25 yuan/kg or 7% YoY. Both MOM and YoY growth rates dropped as compared with the previous months. In December, the price during the the last 20 days was lower than in the first ten days.
Raw milk price in China skyrocketed from 2013 to 2014 thanks to the supply and demand situation of the raw material market both at home and abroad, a record level of 4.3 yuan/kg was created. The growth of demand for milk has been faster than the growth of production since 2019, raw milk price trended up, however the momentum in Q4 2019 eased as compared with same period 2013. BOABC attributes the easing of the surge of milk price to the following reasons, (1) the supply at the international market is better than in 2013; (2) the proportion of self-sufficiency of milk source of processing companies rose, the processing companies have enhanced control over milk source and hence has a stronger voice on pricing raw milk.