FCMP
New Zealand product sets the scene on the world market
Europe
No big changes
Contrary to our usual report that FCMP in the EU is only made to order, several manufacturers have apparently stocked up decent volumes in the past month or so. Despite larger supply, though, demand remains lackluster. The current price is about EUR 4250 ex works, and as Q4 production is usually particularly low, there is some uncertainty about the price at that period. Most players therefore maintain their short term focus.
Americas
Good production outlook pushes prices down
The price for FCMP in Latin America has been going down, as milk production in the main countries Argentina and Uruguay recovers rapidly against weak comparables of last year. As this coincides with sluggish Brazilian demand and hand-to-mouth buying only the supply side is now offering USD 4100 FOB for spot deals, which is 3.5% lower than early June. The forward curve is downward, and Q4 offers are around or just below USD 4000. The outlook for the upcoming season is favorable with good weather circumstances and since the prices in New Zealand are trending down the producers in Latin America will have to follow.
Asia-Pacific
Further price easing expected
In the last weeks of June the FCMP market in APAC was very quiet. On the early July GDT session there was relatively strong buyside activity out of China and the Middle East, and despite a 50% increase in volume on offer the price did not decline as much as some had expected. This depicts that there is latent demand, but it is also clear that towards the start of the new season the buyside anticipates further price relaxation. This prevents them from going all in and rather keeps them at a short forward cover. The current spot price is USD 3950 FOB.
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