By Diao Ying (China Daily)
Updated: 2008-03-29 10:22

Bright Dairy, one of the country's major milk producers, raised the prices of some of its milk products on Friday after getting approval by the National Development and Reform Commission (NDRC). 

A girl stands beside a Bright Dairy booth at a supermarket of Yichang, Central China's Hubei Province, on March 28. Approved by the regulator, Bright Dairy raised the prices of some of its milk products on Friday. [Asianewsphoto]

The Shanghai-based company is China's third largest dairy producer, after Mengniu Dairy and Yili Co.

The company will raise prices of fresh milk and Ultra High Temperature milk by 14 percent in certain regions, it said in an announcement to the Shanghai Stock Exchange on Friday.

In January, the NDRC asked producers of some daily necessities to get approval before raising prices to avoid increasing inflationary pressure. That means makers of milk, flour, rice, noodles and cooking oil have to receive approval before raising prices.

The decision to allow Bright to increase its prices marks the first time the authorities have allowed a price rise.

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The commission said on its website that it had also given permission to Shijiazhuang Sanlu Group, based in northern province of Hebei, to raise milk prices.

Mengniu, the largest dairy maker in China, said it has no plans to raise prices yet. Zhao Yuanhua, the company's spokeswoman, said it had not applied to the NDRC for a price increase yet.

However, she also said the enterprise is under pressure and is "making adjustments" because the price of raw materials is increasing and other costs, such as transportation, are on an upswing.

Wang Dingmian, an official with the China Dairy Association, said the NDRC was likely to approve price rises by other milk enterprises.

"The major milk producers are facing very big cost pressure, " Wang said.

He said prices of agricultural products on the international market are still high, which pushes up the price of cow feed. That leads to cost increases for domestic milk producers.

The annual report by Bright, released last week, showed that its profit had declined by 82.5 percent last year as a result of higher labor costs and fierce competition in the market.