Media Updates, page-9107

Latest data on infant formula exports from Lyttleton port to China in April 2021 were released today.

Very similar level to March 2021, possibly suggesting a return to a more normal baseline level after a surge in exports around the end of last year.

It is worth noting that the surge I pointed out previously lines with the China label inventory build-up that was stated in the recent trading update: "The rate of decline relative to 2Q21 was mainly due to increasing distributor inventory to mitigate the risk of the potential of a second wave of COVID-19 in China in 1H21."



So you can see the initial export surge due to COVID in March 2020, then a second surge in November/December 2020 mentioned in the update. There was drop in January 2021 due to Chinese New Year, and followed by an increase which presumably includes normal shipments as well as some of the shipments that were deferred due to the New Year holiday period.

March and April 2021 then look like a return to a baseline level while a higher level of inventory is run down (similar to what happened in May - September period in 2020). So the future exports data for May and June 2021 may give some indication as to whether there is too much or too little inventory in the MBS channel relative to demand.

Overall, the total gross export weight for FY21 so far is already 20% higher than for all of FY20 with two more months remaining in the year.

They are up 50% on the previous corresponding period (July 2019-April 2020 vs. July 2020-April 2021). So if the trend continues we could probably estimate that around 50% more product will be shipped to China in FY21 than was the case in FY20, but what that translates to in terms of sales is another question.