(Yicai Global) June 12 -- As China's infant formula registration system, price competition and cross-border purchases continue to hit the nation's milk powder market, suppliers are turning to goat milk powder as a new area of growth.
The new wave of demand has skyrocketed the price of goat whey powder, a core, usually-imported ingredient in goal milk powder.
Previously, most Chinese goat milk powder makers were regional dairy farms in the northwest of the country. However, leading domestic companies, including Ausnutria Dairy Corp. Ltd. [HKG:1717], Heilongjiang Feihe Dairy Co. and Yashili International Holdings Ltd. [HKG:1230], have all ramped up efforts to expand their presence in the goat milk powder market this year.
With more and more dairy companies looking to make the switch, the price of goat whey powder has climbed from between CNY20,000 (USD2,942) to CNY30,000 a ton to as much as CNY120,000, said Song Liang, a senior dairy analyst.
Goat whey powder is mostly used in the production of goat milk powder for babies, one of the key markets in the industry. However, the whey is actually derived from goat cheese, which few companies in China can produce, so most of the whey in the country is imported from Italy and the Netherlands. As global demand for goat cheese isn't particularly high, there are a limited number of companies that export the product.
Companies shouldn't all rush into producing goat milk powder, Song told Yicai Global, adding that they should act within their abilities. Only a handful of producers, such as Ausnutria, are able to produce goat whey, he added, saying most others will need to import the ingredient. However, as few firms export goat whey, the rise in demand from China has sent prices spiraling up.