Data from the National Bureau of Statistics indicates the output of liquid milk and the output of solid dairy products in the first seven months of 2008 stood at 9,219,000 tons and 2,222,000 tons respectively, up 10.89% and 8.31% from same period last year respectively. In July itself, the output of liquid milk and solid dairy products was 1,389,000 tons and 291,000 tons respectively, up 11.8% and down by 3% from same period last year respectively. According to BOABC, the rapid growth of the output of liquid milk in July is attributable to the extensive and long-lasting price battles based on gifting buyers, which greatly mobilized the consumption demand for liquid milk.

List

BOABC VIEW POINTS 3

SECTION I. PRODUCTION of MILK and DAIRY PRODUCTS 3

1.1 Raw Milk Production 3

Focal Point 3

Inner Mongolia 3

Shanxi 4

Shaanxi 4

Ningxia 4

Jiangsu 4

Yunnan 4

Hubei 4

Guizhou 5

Raw Milk Price 5

1.2 Dairy Production 6

SECTION II. DAIRY TRADE 7

2.1 Import Trade 7

2.1.1 General Status of Import 7

2.1.2 Import of Main Dairy Products 8

2.1.3 Price Status of Categories of Imported Dairy Products 10

2.2 Export Trade 12

2.2.1 Fresh Milk 12

2.2.2 Milk Powder 14

SECTION III. MARKET TRENDS OF DAIRY PRODUCTS 16

3.1 Retail Price of Fresh Milk 16

3.2 Whey Powder Trend 17

3.3 Milk Powder Market 19

3.4 Lactose Market 20

SECTION IV. TREND OF DAIRY ENTERPRISES AND INDUSTRIAL INTEGRATION 20

4.1 Yili 20

4.3 Bright 21

4.4 Sanyuan 21

4.4 Xiajin 22

4.5 V V 22

SECTION V. NEW TECHNOLOGIES AND NEW PRODUCTS 22

DANISCO Introduced New Type of Probiotics for Dairy Products 22

Bright Dairy Extends Application of Natural Lactobacillus in Feed for Dairy Cattle 22

SECTION VI. NEW PROJECTS OF THE MONTH 23

Ningxia: Taizinai Ningxia Raw Milk Base Set up and in Operation 23

Hunan: Nanshan Dairy to See Establishment of Dairy Processing of 100,000 Tons Per Year 23

Heilongjiang: USA International Dairy Holding Company Invests 200 Million Yuan for Hailun Dairy Processing Project 23

Xinjiang: Tianrun 100,000-ton Fresh Milk Project Being Constructed 24

ABOUT BOABC 25