The European dairy season peaked in May, and now the consumption has commenced to decelerate. Higher retail prices are also likely to boost consumer demands for private label dairy products, but the market does not foresee an overall weakening in demand.
The past week was a time for reflections with PMLA and VIV EUROPE taking place in the Netherlands. Conclusion has been unanimously that most of the buyers are covered in the stored for products, partially due to geopolitical reasons, and also interpretation of milk indicators suggesting that the product will be less seen and hard to get. Thursday (in this case one might call it the Ascension Day) and Friday were all about ideas that traders had been sharing as it was quiet on the market. A number of European stock markets are closed on Whit Monday, but these are among the few who will attend the GDT today. If you look at previous week in Europe, the beginning and end had large price differences. This can be perceived as a rise in GDT quotations that we will see tomorrow.
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It could be found difficult to recap the correct price for the SMP market for the previous week. As the beginning of it revealed the old prices, the commodity was limited or even unavailable to buyers. The week proceeded with an acceleration in prices where buyers were already prepared to pay extra for their mistakes or uncertainties. However, the surplus was unavailable even at the desired price. With reference to the demand from North Africa and the Middle East is returning, but at current prices and a stronger euro, exporters have so far reported difficulty signing contracts.
FMCP market is quiet and stable as this product is manufactured only on request. As the saying that history likes to repeat itself, a modest increase in pricing in the CEE region, including Poland, for FCMP throughout the previous week can be observed.
Yet again, the switch and growing production of cheese from the European Union’s side resulted in an increase in sweet whey concentrate. An availability of the product has been witnessed and resulting in this, sweet whey powder prices are decreasing.
Same instance follows the manufacturers pushing more products from liquid whey for production of WPC. The trend of more WPC regular on the market is seen, however regarding instant product, we do not see a comparison with the two.
The price of butter remained relatively close compared to previously recorded. We hear of manufactures using alternatives from foreign, non-EU sources that include dutiesIt is said that it makes the butter more profitable to export as a substituting the cream price Europe sees right now. We have also witnessed German retail prices being established for a month only at present. Q3 and Q4 rumors and indications on prices are not far below nor far up the present market. The question is whether the milk price will stay on the same level for it to save its value.
Uncertainty follows the cheese sector at present with factories being moderately firm for their product. We heard bids from buyers at the level of 5,15 – 5,25 EUR/kg FCA for Gouda 48% which differs from today’s quotations. Rates are most likely to stay stable or firm – depending on what the seasonality brings to us.
Not much activity in the case of the cream market as it is available across all regions. The only changes we observe are slight increases in prices this past week.
Spot prices rose this week and most processors’ payouts for June increased. The market has been quiet and affected SMC. We still do not see an increase in milk production in the EU. Although there could be more demand for products from the U.S., but in that region, milk production is growing week-over-week in Northeastern farms.