Chinese imports may suffer from currency devaluation

Published 19 August 15

The recent devaluation of the Chinese yuan, which will help support Chinese exports, is another piece of bad news for global dairy traders. Imports of commodities, including dairy products, will become relatively more expensive for Chinese buyers as the currency falls. As such, prices will be under pressure to fall in order to retain Chinese demand.

The 4% reduction in the value of the Chinese yuan would mean that a tonne of WMP, priced at US$2,400/tonne in July would cost Chinese importers the equivalent of $105/tonne more at current exchange rates.