China's growing dairy industry is expected to cause unease amongst exporters

It's on track to become the world's third largest milk producing country.

Lincoln University Honorary Professor of Agri-Food Systems Keith Woodford says our industry will be watching the situation.

He says Fonterra and other companies will be conscious when they have one country which is so important, they will always have to be cautious - as if things go wrong it would be disastrous.

However Woodford says China is diversifying its dairy imports, and they predict a 25-percent increase in dairy imports over the next 10 years.