What we’re seeing this week
This week, Steve Spencer & Joanne Bills are back with production and export updates from Europe as well as an update on New Zealand October exports. The latest European production data shows a fall in September with output down 0.8% YOY, with declining production in France, Ireland, the Netherlands and Germany for the month. With less milk in the vat, EU SMP and cheese exports eased in October. In New Zealand, the trend is reverse with exports of major dairy commodity products rising in October except for butter.
The latest GDT event resulted in a flat index driven by small gains in WMP which offset weaker SMP prices and a heavy fall for cheddar.
Chart of the week
Chinese dairy imports fell 14.5% YOY in milk solids equivalent (MSE) terms during October, driven by lower shipments of WMP and dry whey.
WMP imports were down 32.3% YOY to 18,529t, and year to date volumes fell 38% or 237,703t. With high local inventories reported at 70,560t in September by BOABC, SMP imports slowed over the latest quarter (with average CIF import prices falling to US$2,994/t), but with strong buying earlier in the year, volumes were up 9% for the year to date.
Imports of fats were weaker for the year to date – butter and AMF fell by 9% and 10% respectively. In the month of October, butter fell 11.5% and AMF declined 40.8% YOY. Cheese imports have risen 18% since the start of the year with October volume up 15% YOY, as average CIF shipped prices fell to US$5,116/t. Dry whey imports declined for the fourth consecutive month in October, down 3.6% YOY to 53,917t.