Projections of Dairy Product Consumption and Trade Opportunities in China

Abstract

China has been rapidly increasing its consumption and imports of dairy products in recent years. A two-stage demand system was estimated for livestock product consumption in urban China over the 1990s. Total expenditure elasticities for the livestock commodity group and expenditure elasticities for dairy products within the livestock commodity group were calculated. The results suggest that dairy products, even in urban areas, remain luxury goods because of a high expenditure elasticity (1.14). Due to rapidly increasing consumption and the likelihood of inadequate supply growth, China will continue to increase its