On　December 10th, 2008, it was decided by the executive meeting of the State Council that the central government would allocate in 2009 subsidy funding of 10 billion RMB for the purchase of agricultural machinery. On December 26th, the Ministry of Agriculture and the Ministry of Finance jointly drafted and issued the “Implementation Plan for the Subsidies for the Purchase of Agricultural Machinery in 2009”. Recently, the provinces are implementing the above-mentioned implementation plan, to step up the construction of milk stations, enhance the level of scaled farming and ensure the quality and safety of raw milk from the sources.

List

BOABC VIEW POINTS 3

SECTION I. PRODUCTION of MILK and DAIRY PRODUCTS 3

1.1 Raw Milk Production 3

Focus of this Issue 3

Inner Mongolia 4

Heilongjiang 4

Shaanxi 4

Shandong 4

Xinjiang 4

Hebei 5

Zhejiang 5

Jiangsu 5

Guizhou 5

Chongqing 6

Shanghai 6

1.2 Dairy Production 6

SECTION II. DAIRY TRADE 8

2.1 Import Trade 8

2.1.1 Analysis of Overall Import Trade 8

2.1.2 Analysis of Import of Main Dairy Products 8

2.1.3 Analysis of Prices of Main Imported Categories 9

2.2 Export Trade 12

2.2.1 Fresh Milk Export 12

2.2.2 Milk Powder Export 13

SECTION III. MARKET TRENDS OF DAIRY PRODUCTS 15

3.1 Retail Price of Fresh Milk 15

3.2 Price of Bulk Packaging Milk Powder 16

SECTION IV. TREND OF DAIRY ENTERPRISES AND INDUSTRIAL INTEGRATION 16

4.1Yili 17

4.2 Mengniu 17

4.3Bright 17

4.4 Sanlu 17

4.5 Tianyou 18

4.6 Taizinai 18

4.7 Sanyuan 18

4.8 Huahuaniu Dairy 19

SECTION V. NEW PROJECTS OF THE MONTH 19

Hubei: Tianyuan Dairy Co.’s 10,000-Cattle Dairy Farm Inaugurated 19

Xinjiang: Vivi Group’s New Project in Chengnan Industrial Park of Jimusaer County Inaugurated 19

SECTION VI. RELEVANT POLICIES 19

ABOUT BOABC 21