Despite a strong New Zealand whole milk powder output recorded in March, up 9.8% year-on-year, the Mintec price of New Zealand whole milk powder increased by 27% to NZD 5,807/MT in the 3-month period to 26th May 2021. New Zealand whole milk powder manufacturers are taking advantage of high whole milk powder prices by scheduling as much whole milk powder production as available milk allows. This substantial price rise is attributed to the buying interest from China and Indonesia, which has helped maintain firm prices.
New Zealand whole milk powder exports account for around 95% of the total New Zealand production, therefore the New Zealand whole milk powder price effectively mirrors the world milk price and there is very little if any lag. As a result, similar prices increases have occurred in the European market, as the Mintec average price of whole milk powder over Mar-May ’21 increased by 13% quarter-on-quarter to reach EUR 3,162/MT.
The New Zealand milk season is finished and the poor performance of Milk collection in Europe in Q1 2021 translated into a whole milk powder production decrease of 8.2% against the same period last year. Together with continued firm demand from China and Southeast Asia, there is bullish sentiment for the market over the next quarter.