As of Sunday, around 130 Chinese milk producers remained closed as a result of the melamine-tainted dairy scandal, said the Ministry of Industry and Information Technology (MIIT) on Wednesday.

That means about 20 percent of dairy producers in China are inoperable compared to Oct 2. when 32 percent were closed. According to Zhang Li, director general of the consumer goods industry department of MIIT, of the 638 dairy producers in China, 128 remain closed.

Zhang said the task to better regulate the milk industry still remains arduous as some dairy manufacturers lack adequate testing equipment partly because of its cost.

Figures revealed that raw milk purchases, production of milk and milk powder increased by 28 percent, 58 percent and 37 percent respectively from Oct. 2 to Nov. 2.

Some Chinese dairy products were contaminated with melamine, a toxic chemical added to products to cheat nutrition tests. The scandal became public in September.

Despite rising production, restoring market confidence is still slow, said Zhang. For instance, liquid milk inventories of Mengniu and Yili, China's two leading dairy producers, are 1.4 times and 3.6 times the levels seen in Oct.

(Xinhua News Agency November 5, 2008)