Dairy chief Dobbin insists Chinese boom years are over
The head of dairy firm Dale Farm has said "the Chinese boom years are over" as markets continued to suffer over fears that the crown is slipping for the world's newest economic powerhouse.
Markets had gained ground on Tuesday after the torrid losses of so-called 'Black Monday'.
But the FTSE 100 Index slumped more than 100 points yesterday to close at 5979.2, wiping more than £30bn off the combined value of blue-chip firms, after a volatile session of ups and downs amid continuing anxiety over China.
Germany's Dax and France's Cac 40 were also down by around 1%.
The FTSE 100 had seen a 10-day run of losses culminating in one of the worst sessions since the financial crisis when it fell 4.7% on Monday.
Anxiety over a slowdown in the Chinese economy rose two weeks ago when the central bank devalued the Chinese currency, the yuan.
Many Northern Ireland exporters have targeted China for growth.
Dale Farm had enjoyed export sales of £102m in the year to March 31 2014, sustained by demand from China and Russia.
But its chief executive David Dobbin said the former demand for dairy products in China had been levelling off even before the present downturn.
Mr Dobbin (below) said: "The slowdown in China has already been a marked feature in the dairy sector with dairy imports into China this year running at around one third of last year's level.
"This is partially due to destocking after strong purchases last year but there is no doubt that the Chinese boom years are gone and that it is heading to more moderate growth.
"This poses a further threat to the fragile economic recovery in the west and it is vital that the UK government doesn't put up interest rates too early."
Annual growth rates for the Chinese economy have been around 10% in recent years but growth has now slumped to 7%.
In an interview with the Belfast Telegraph this week, Fane Valley boss Trevor Lockhart said the volume of milk powder shipped to China in 2015 had fallen by two-thirds.
He said along with oil-rich countries purchasing less milk, the "combined impact of these factors coupled with increased global supply has triggered the price collapse".
PwC chief economist Esmond Birnie said that while Northern Ireland's direct exposure to the Chinese market may not be great, it did have "considerable indirect impacts" here.
"The current difficulties in the dairy market reflect in part a reduction in Chinese demand for milk powder. China now represents about one-half of global demand for powder.
"As the Chinese economy slows we should expect a further depressive effect on some of the other major markets which Northern Ireland relies on."
Chancellor George Osborne has said the recent market volatility showed that "lots of risks" remained in the global economy and that Britain was "not immune to what goes on in the world".