Dairy Commodities - Q3 2020
The COVID-19 pandemic continues to wreak havoc across the world’s, economic, social and political systems, catching world leaders in its cross hairs who are being forced to choose between suffocating their economies or saving the lives of their citizens. The only thing that is for certain at this time, is that we will be dealing with the Coronavirus for many more months, possibly even years until a vaccine is found, tested and distributed globally.
As expected, the prices of Dairy commodities have faced a bumpy ride in the past few months. Some of the factors contributing to the price increases were: No intervention stocks in Europe, a striking balance in the supply-demand ratio; strengthening of Euro against USD, increased demands of certain products from Europe due to non-availability in Oceania and an increased demands from large economies like China as they opened again for imports.
With the pandemic keeping the situation unpredictable, it is difficult to say when and if the price tide may change again in near future.
SMP: For the year 2019, France produced app. 28% of the total SMP produced from the EU-28, followed by Germany accounting for 26% of total production.
Germany, which was the largest contributor LY with app. 36% of total EU WMP production, continued to lead from the front with a contribution of app. 169k MT of WMP for the period of Jan-Jul 2020, which is 34% of the total WMP produced out of EU 28 in the first seven months.
For the period Jan-July 2020, the EU–28 saw an increase of app. 21,500 MT over LY for the same period
for 2019. EU-28 produced 975k MT of SMP in first seven months of 2020 with the highest production recorded in May 2020 of 155k MT.
For the period Jan-July 2020, France maintained its leading position with 261k MT followed by Germany with 253k MT and Poland third with 108k MT. The three countries contribute to approx. 64% of the total SMP produced in EU–28 for the period of Jan-July (total production being 975k MT).
April recorded the lowest SMP prices so far in the year for Germany and USA with an average of 1,978 Euro/MT FOB and 1,797 Euro/MT FOB respectively. Oceania recorded its lowest prices so far into the year in the month of June with an average of 2,306 Euro/ MT FOB.
SMP from Germany saw an average price of 2,200 Euro/MT FOB as of 30th September 2020 as against an average price of 2,453 Euro/ MT FOB in June and an average price of 2,640 Euro/MT FOB in March 2020.
SMP from Oceania recorded an average price of 2,536 Euro/MT FOB as of 25th September against an average of 2,262 Euro/MT
FOB in early June 2020 and an average of 2,487 Euro/MT FOB in March 2020, showing signs of strengthening.
SMP prices from USA held at an average of 2,080 Euro/MT FOB as against 2,200 Euro/MT FOB in March 2020 and 2,000 Euro/MT FOB in June 2020. They recorded a low of 1,800 Euro/MT FOB in April 2020.
The non-availability of SMP HHHS from Fonterra continues to push demand for SMP HHHS from other manufacturers out of Europe and Australia. This is expected to continue in the coming months pushing demands for SMP HHHS
from alternative origins and helping average SMP prices.
Q2 2020
WMP: The production of WMP in Europe showed an increase of approx. 5.3% in the first seven months of 2020. For the period of Jan-July 2020, EU-28 produced approx. 493k MT of WMP as against 469k MT for the same period LY.
Netherlands continues to be the second largest producer of WMP from EU-28 this year too, with a contribution of 110k MT followed by France with a 78k MT production of WMP, contributing respectively 22% and 15.8% of the total WMP produced out of EU-28 in the period of Jan-July 2020.
The German WMP was exported at an average price of 2,800 Euro/ MT FOB as of end September 2020 against an average of approx. 2,693 Euro/ MT FOB in June 2020 and 2,970 Euro/ MT FOB in March 2020. The lowest price for WMP from Germany this year was recorded in the month of May with an average of 2,615 Euro/MT FOB.
WMP prices from Oceania averaged at 2,518 Euro/MT FOB in end September against an average price of 2,540 Euro/MT FOB average in June and an average of 2,610 Euro/MT FOB in March 2020. The lowest price for WMP from Oceania for this year were recorded in the month of May with an average of 2,477 Euro/MT FOB.
WMP prices from US averaged at 3,160 Euro/ MT FOB in end September with the lowest price for WMP from US for this year recorded in the month of August at an average of 3,108 Euro/MT FOB.
DAIRY COMMODITIES
