Guoyuan International released a research report stating that as China's dairy demand stabilizes, anti-subsidy measures will stimulate incremental demand for domestic deep-processed products and raw milk. Coupled with ongoing upstream herd reduction, the supply-demand balance for raw milk is expected to accelerate, making YOURAN DAIRY (09858) a key stock to watch. Key points are as follows:
**Event Overview** China’s Ministry of Commerce announced preliminary anti-subsidy rulings on December 22 for certain dairy products imported from the EU. Starting December 23, 2025, temporary anti-subsidy measures will be implemented in the form of deposit requirements.
**Scope of Investigation** The anti-subsidy probe, initiated in July 2024, was filed by the China Dairy Association and the China Dairy Industry Association, alleging that EU-subsidized dairy imports caused material harm to China’s domestic industry. After a year-long review, preliminary evidence confirmed substantial EU subsidies under its Common Agricultural Policy, leading to material damage with a clear causal link. The measures target products like fresh cheese, processed cheese, and cream, with subsidy rates ranging from 21.9% to 42.7%.
**Market Impact** From January to October 2025, China imported 2.18 million tons of dairy products, with EU-sourced cheese, butter, and cream accounting for 15%, 12%, and 29% respectively—second only to New Zealand. Anti-subsidy measures are expected to cover ~5% of total dairy imports.
Since 2023, diverging price trends between domestic and imported dairy have eroded the cost advantage of foreign products. The new measures will further weaken import competitiveness, potentially reducing overseas supply and accelerating rebalancing in China’s raw milk sector.
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