Martin Ferris (Kerry North-West Limerick, Sinn Fein)
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43. To ask the Minister for Agriculture, Food and the Marine if he will report on the level of imports of dairy products from the European Union into China which were reported to be 40% down in 2014; and if this will affect the sector here. [26068/15]

Simon Coveney (Cork South Central, Fine Gael)
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The development of a dairy and agri-food export market for Irish produce in China has been a priority for me since becoming Minister. I strongly believe that progress to date can only be viewed as very positive, with the added bonus of a huge latent potential remaining to be developed on an ongoing basis, as we increase production following quota abolition.

As Minister for Agriculture, I have headed two trade missions to China, with dairy market development a significant feature in both. Ireland’s dairy offering resonates with Chinese consumers who place safety, traceability and sustainability at the core of their value proposition. The Chinese authorities undertook a detailed inspection visit of our food safety systems and plants in 2014 and Irish dairy plants received a 100% approval rating which we believe to be the highest success rate of any of our competitor countries around the world. As part of my last mission to China in November 2014 I also hosted a highly successful dairy seminar attended by key Chinese buyers and media.

Recently, Chinese buying on platforms such as the Global Dairy Trade auction has slackened somewhat with Chinese stocks of dairy produce reportedly filled to required domestic levels. Obviously this will have impacts globally on the dairy trade given the volume of product which China buys annually. The slowing of the Chinese market has coincided with increased milk output in the main production areas of Europe, New Zealand and the US which have provided a combination of factors contributing to a softening of the market. There is also the announcement last week by the Russian authorities of the extension of their ban on food products of the EU which, while not unexpected, is clearly not good news for a market already under pressure.

The Irish Dairy sector has made extraordinary strides in China in recent years. Ireland has an evolving focus towards, and nonetheless competes at, the higher value end of the Chinese dairy market. In the infant formula sector, Irish based products are viewed as super-premium brands. China is now Ireland’s second largest export market for dairy produce, compared to 13th in 2008. In total, companies based in Ireland exported almost €400m worth of dairy produce to China in 2014. This is an increase from just €104m in 2010 and highlights the huge rate of growth in our dairy exports there in a short space of time. More recently, in the 3 month period to the end of March of this year, dairy product exports to China from Ireland were up over 50% on the same period in 2014, with infant formula the key driver.

Recently, Chinese buying on platforms such as the Global Dairy Trade auction has slackened somewhat with Chinese stocks of dairy produce reportedly filled to required domestic levels. Obviously this will have impacts globally on the dairy trade given the volume of product which China buys annually. The slowing of the Chinese market has coincided with increased milk output in the main production areas of Europe, New Zealand and the US which have provided a combination of factors contributing to a softening of the market. There is also the announcement last week by the Russian authorities of the extension of their ban on food products of the EU which, while not unexpected, is clearly not good news for a market already under pressure.

My focus now is on expanding even further the growth rates which Irish dairy has achieved in China to date and this involves working closely with Bord Bia and industry to build on recent successes, not just in China but in all of the 170 countries around the worked in which Irish dairy produce is sold. In this regard I plan to lead trade missions to China and West Africa, before the end of this year, which as always will seek to find new business opportunities for Irish dairy products.