Chinese consumers are once again running scared after two case of melamine contaminated milk surfaced in December.

As a result, imports of milk powder are increasing.

Melamine, a chemical used to plastics and fertilisers, was detected twice in cases of product twice last month, but reports from China suggest the contamination could have began as early as the beginning of 2009.

Chinese imports of milk power was expected to increase by nearly a third this month to 40,000 tonnes as consumers turn to foreign product.

The Chinese Ministry of Commerce warned importers to be wary of losses due to oversupply of milk powder.

Dairy giant Fonterra has yet to confirm if it is a beneficiary of the latest melamine scare in China with increased trade.

Fonterra was embroiled in the China melamine scandal in 2008 because of its 43% stake in dairy company Sanlu which sold infant formula contaminated by the industrial chemical.

Six babies died and as many as 300,000 became ill after consuming the Sanlu product.