What we’re seeing this week
Another GDT event and another fall in the price index – in fact the fifth consecutive decline. It is far from catastrophic, as we discuss this week, and the dynamics of fat values continue to be intriguing*. Chinese buyers continue to provide support for commodity prices.
There have been some interesting trade policy developments in the wake of the G7+ where leaders of the largest developed democratic countries signalled their intention to reinforce institutions and norms, including the WTO and rules-based international trade. The EU and US parked their tariff war over aircraft subsidies for the time being. We take a look at the impact of this dispute.
A UK-Australia trade deal was also announced this week. It was an important opportunity for the UK to land a post-Brexit agreement and will be part of a larger strategic move to enter the CPTPP. As always the devil will be in the detail, but there is a long phase-in for tariff removal for Australian agricultural exports and some changed to visa work requirements that will be of most interest to the local industry.
*not that interesting, really
Chart of the week
UK cheese imports were down 17% YOY in April, at 27,882t. For the year to date, cheese imports fell 18% compared to 2020, due to front-loading of shipments in Q4-2020 ahead of Brexit implementation. The weaker April result reflects lower shipments of cheddar, fresh cheese and mozzarella. For the year to date, fresh cheese accounted for 29% of shipped volumes, followed by mozzarella and cheddar at 14% and 11% respectively.
Exports of cheese also declined to 26% YOY in April to 8,489t, 17% below March. For the year to date, cheese exports fell 49% compared to the same period in 2020. In January to April period, Belgium was the leading destination, accounting for 23% of shipped volume, followed by France and Denmark at 10% each.