The Brexit trade deal agreement allows for duty and quota-free trade in dairy products. However, the new red tape requirement, Export Health Certificate (EHC), has made it commercially difficult for shipping small orders, particularly short-life dairy products such as cream and skim concentrate.
UK cream prices rose in the 4-week to 9th June, with the Mintec Benchmark Prices for UK EXW 40% Cream at £1.42/kg, up 5.4% m-on-m, which equals to €1.62/kg. Since the 1980s, UK cream has been exported to European Union in bulk tankers. However, since the UK left the European Union at the end of December 2020, cream exports have dropped as the new red tape requirement hindered UK cream exports to the European Union. This has caused the UK price trend to diverge from the European Union with prices rising at a higher rate.
The Mintec benchmark for German bulk EXW Cream (40% equivalent) stood at €1.91/kg on the 9th June, down 0.5% m-on-m. This indicates a German premium over UK cream on an ex-works basis in the area of around €0.30/kg, one of the highest points in several years. Lower-than-forecasted milk production across European Union has limited the amount of available fresh cream, this being constructive for prices.