China not to impose 25 percent counter tariffs on US alfalfa and livestock feeding whey in 2021 10-23-2020

The Ministry of Finance of China announced that from September 17, 2020 to September 16, 2021, imports of alfalfa and livestock feeding whey from the United States will not be included in the list of imports from the USA subject to tariffs as part of the trade war between the USA and China. This decision is in contrast to a previous tax of 25% applied to these imports. However, taxes that buyers have already paid for these imports will not be refunded.

Whey demand low due to tariffs, but likely to increase as tariffs are lifted

Due to the previous tit-for-tat tariffs imposed by the United States and China on each other's goods, as well as the decrease in demand of livestock feed whey in China, China imported only 247,500 tons of livestock feeding whey from other countries in the first half of 2019, which was a decrease of 26.3% year over year. Among China’s total volume of livestock feed way, imports from the US decreased by 58.7% year over year in the first half of 2019, while the average price of these imports was USD 1,407/ton, an increase of 29.8% year over year compared to the first half of 2019.

In addition, the number of live pigs in China decreased by 32.3% year over year compared to July 2019, and the number of reproductive sows also decreased by 31.9% year over year compared to July 2019.

According to an industry insider, the current price of whey ranges from RMB 4,300 to RMB 4,700 per ton. It is expected that after the revocation of the whey import tariff, the volume of whey imported from the US will start to increase, and the cost of this whey will start to drop in response. During the first half of 2020, 46% of Chinese whey imports came from the European Union, 33% came from the United States, 8% came from Belarus, and 13% came from other countries. In particular, the total whey import volume from Belarus in 2020 was almost three times as much as that of the previous year.

Whey industry picks up speed, while lactose market hits a lull

After a sluggish summer, the whey industry is gaining energy during the fall. According to whey manufacturers, the volume of whey production remains stable, but many manufacturers are planning to increase production. With the fierce competition in the high protein market, many whey industry insiders think the production of whey powder will also increase. However, the recent price of lactose remains stable, and even though lactose manufacturers have increased production in recent years, some manufacturers plan to decrease their production.

Furthermore, according to some US manufacturers, more lactose products from the European Union are showing up in the international market. Due to African swine fever as well as trade issues, the demand for lactose products has lessened in Southeast Asia, and as a result, the market for lactose products is currently a buyer’s market.

For more information on China’s live stock market, please check our resources on China’s food and feed market.

Subscribe to our Newsletter


Next Press