China overtook Russia and Pakistan to rank third in the world after India and the United States in the production of dairy products in 2006, Monday's China Securities Journal reports.

China's production of dairy products grew 15 percent to reach 32.9 million tons in 2006, said Liu Chengguo, director of the Dairy Association of China.

Liu attributed the rapid development of the country's dairy sector to a fast growth in the sector's processing capacities.

Both industrial output and sales revenue of major dairy processing companies in 2006 were seven times the 1998 figures, standing at 107.4 billion yuan (14.1 billion U.S. dollars) and 104.1 billion yuan respectively, according to Liu.

Statistics show the number of major dairy manufacturing enterprises, namely state-owned enterprises and those with an annual sales revenue of above five million yuan, has doubled over the last seven years to reach 698 in 2005, and 14 of them boast a daily processing capacity of more than 1,000 tons.

There was also a significant rise in the consumption of dairy products in recent years as the consumer market expanded from large and medium-sized cities to towns and villages, Li noted.

The average consumption of dairy products by Chinese residents in 2006 was the equivalent to 25.6 kilograms, up 76.6 percent on 2000.