UN FAO reports on international dairy prices
The Food and Agriculture Organization of the UN has released its international dairy price review, which says that the 12-month increase in global prices ended in June, meaning there is a slowdown in global demand. Butter saw the largest drop, with a fast decline in global import demand and a slight increase in inventories, particularly in Europe, the FAO notes. WMP prices declined as China purchased less, and global exports were sufficient to meet existing orders. Price quotes for cheese and SMP also dipped slightly on reduced import demand and higher exports from the major producing regions.
From January to June 2021, solid import demand from Asia, mainly China, underpinned the increase in international dairy prices during the period. In China, the fast pace of economic growth and the real appreciation of the RMB induced a surge in consumption, leading to higher dairy imports. In addition, the rapid recovery in China’s pig herd population boosted higher imports of whey powder. More home cooking and baking during lockdowns increased retail sales such as butter and cheese in many dairy importing countries, partially offsetting lower food services sales. Import purchases by some countries in the Middle East and North Africa also increased, supported by revived petroleum prices, improved economic activities, and increased inbound movement of expatriate workers. In recent months, demand for spot supplies from Oceania has risen sharply due to concerns over short-term sourcing challenges amid limited container availability in Europe and North America, the FAO says.
Supplies saw a change, with heatwaves and dry weather in Australia and New Zealand making declining milk production increase and driving up milk prices. Meanwhile in Europe, cold weather made trucking more difficult and milk deliveries to processors as a result, which led to higher international prices for butter and milk powders.
For further information, visit fao.org/3/cb5635en/cb5635en.pdf.
