China’s Butter Imports Skyrocket Due to Rising Domestic Demand and Preference for Quality

In 2024, China is witnessing a significant increase in butter imports, driven by rising domestic consumption across various sectors including bakery products, yogurt, ice cream, and food services, according to a USDA report. High-end food processors, particularly premium bakeries, are increasingly favoring butter over plant-based alternatives, reflecting a broader trend towards premiumization in food ingredients.

In the first half of 2024, butter imports increased by 10%, with most supplies coming from New Zealand and the European Union. Despite a slight rise in domestic butter production, driven by increased dairy processing activities and a surplus in fluid milk production, the quality of locally produced butter and cream often falls short of the standards required for high-end uses. This quality gap has reinforced China’s reliance on imported products for premium applications.

New Zealand notably dominates the Chinese butter import market, holding nearly 90% of the market share in early 2024. This strong position highlights New Zealand’s strategic focus on producing high-value dairy products for international markets, especially in regions with growing demand for quality dairy ingredients. As China continues to increase its consumption of butter and related products, the dynamics of the global dairy trade are expected to shift, creating more opportunities for major exporters like New Zealand to strengthen their positions in lucrative markets.