The market sentiment for EU unsalted butter was reported bearish during the week, with prices declining throughout the week. However, price reductions are reported to range widely across the EU, and from one producer to another, while Irish and Polish prices have reportedly decreased markedly. Dutch and German price declines have been smaller in comparison. Brand manufacturers across the EU are still holding on to higher price levels, unwilling to move from their positions.
While production outweighs demand, which has led to growing stock across the EU, sellers remain unwilling to commit to Q3 2023 contracts. Although spot buying interest remains limited, demand for Q3 2023 remains strong, but price negotiations are reportedly challenging. Buyers are targeting contracts at current price levels without any premium or carry charges, but producers are only looking to contract for Q3 2023 if buyers are willing to pay a premium, or for the carry. The cost of carrying for butter is primarily the storage cost. With neither side willing to move from their position, it seems likely that activity will remain limited moving forward.
The assessment for Unsalted Butter EXW European Union [Mintec Code: J116] was made at €4,550/mt, down €100/mt w-o-w.
One market source commented, “short-term demand for butter seems to be largely covered, and buying interest has reduced over the past two weeks. While some producers keep their prices elevated for branded products, smaller producers and traders are willing to reduce prices. We don’t expect to see large price movements over the coming 2-3 weeks, but we see a slightly bearish sentiment for the weeks ahead.”
The market sentiment for AMF remained slightly bearish on the week, with prices dropping marginally compared to the week prior. While supply remains constant, demand continued to dry up this week. During the previous week, final volumes for Easter demand were covered, but these buyers now appear to have met their demand. Low demand and stable supply will likely weigh on AMF prices over the coming two to three weeks, according to multiple market sources.
The MBP for Anhydrous Milk Fat EXW EU [Mintec Code: AMFEU] was assessed at €5,675/mt on 30th March, down €25/mt from the previous week.
