Update: WMP market September 2019

October 9, 2019

2 mins read

  • EU WMP market : The average price of EU WMP decreased slightly by 1% over the last three months (Jul-Sep), compared to the previous average (Apr-Jun) due to low demand from foreign markets, especially from North Africa and the Middle East. 
  • EU WMP exports declined by 19% y-o-y for the January-July period as a result of tensions in Algeria (the second-largest EU WMP importer). Lower export volumes are likely to continue weighing down on EU prices in the next few months. 
  • The production of WMP in the EU was subdued in the first half of 2019, limiting further price decreases. WMP production is unlikely to rebound in the next three months, counterbalancing a potential sharp price decrease. 
  • Despite the lower production and a strong domestic consumption, the EU is likely to see its WMP stocks increase in the next three months, driven by low export demand. The gap in EU WMP exports to Algeria (currently at 40,000 tonnes) is likely to continue within the next three months until the 2019 Algerian presidential elections in December, and is expected to be one of the key determinants in the EU price decrease in the next few months.

New Zealand WMP market : The July–Sep New Zealand average WMP price decreased by 4% compared to the previous three-month average (Apr-Jun), due to higher milk availability. New Zealand milk supplies have become more available over the last three months (Jul-Sep), as the spring months approach in the Southern Hemisphere. New Zealand’s WMP export demand, mainly driven by China, increased by 14% during January-July period at 905,000 tonnes, adding upward pressure on prices in 2019. New Zealand’s ending stocks are likely to shrink to 80,000 tonnes at the end of 2019 as a result of strong Chinese demand, adding upward pressure on export prices in the next three months.

As half of the globally traded WMP volumes are imported by China, the increasing demand from this Asian country is likely to be the key determinant of WMP price increases in New Zealand in the next three months, as the country is the leading Chinese supplier of WMP. Moreover, the free agreement trade as well as New Zealand’s WMP price discount, compared to the EU’s prices, are expected to add further support to New Zealand’s export demand, thus likely to increases prices in the October-December period.

 

From weather to political, all the factors impacting the EU and NZ WMP markets have been analysed to provide a market outlook for the next three months. Mintec’s market outlooks (schedule) provide insights on factors shaping the market dynamics of various commodities, providing the opportunity for market participants to stay ahead of factors that will impact procurement decisions.

Topics: Dairy & Eggs
Anais Post Image
Anais Divanach

/You May Also Like

Featured Image
Saudi Arabia is pushing the Organization of the Petroleum Exporting...
Featured Image
Australian almond exporters continue to take advantage of the trade...