Infant formula shares are on a tear

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Sales of Australian infant formula to the booming China market appear to be back on track.

The share price of infant formula making companies surged on reports that China has delayed stricter cross-border e-commerce regulations.

A short time ago, Blackmores was up 16% to $117.35, Bellamy’s 10% to $4.21 and a2 milk 4% to $2.56.

China appears to have changed its position, now classifying goods coming in via ecommerce platforms as personal rather than commercial trade.

Chinese Premier Li Keqiang is due in Australia tomorrow for trade talks.

Trade of Australian-made infant formula was disrupted late last year by an apparent change in regulations, including new licensing and labelling requirements.

Sales of Bellamy’s Tasmanian-based organic infant formula were hit hard after the changes.

The fallout saw the departure of the CEO and a shareholder revolt which ended with a change in the board of directors.

Bellamy’s now expects full year revenue to be in the range of $220 million to $240 million, at best flat on 2015 and well below previous analyst expectations of about $330 million.