FCMP
Demand is overall relatively quiet
Europe
Stable, quiet and thin market
The EU FCMP market remains quiet and thin, as demand continues to be affected by the high cocoa prices. Product is strictly made-to-order because despite good valorization it does not make sense to hold inventory. The general price level is unchanged versus last month at about EUR 4200-4250 ex works. Small orders can cost a little more. The market for FFMP is more lively and the price levels are EUR 2450-2500 ex works.
Americas
Market sentiment is changing
Milk production in Latin America has recovered in the current season but Brazilian demand does not keep up. What certainly doesn’t help is the falling cheese price in Brazil which pushes more milk towards the local dryers. As a result the supply-demand balance in the region is changing and manufacturers in the export regions are experiencing some pressure. Prices have more or less aligned with global market levels at USD 4250 FOB. Concern is building about the start of the new season in a few months. Additional supply recovery will inevitably increase the pressure in the local market.
Asia-Pacific
Buyside tries to wait until the new season
Most buying activity in the APAC FCMP market was found in the spot market, where those players that need product urgently have to pay the current price of USD 4250 FOB. At this relatively high price the majority of the buyers hold off as much as possible hoping that the prices will ease once the new season starts. At the early June GDT China was one of the main buyers, whilst off-line SE Asia was most active. It remains a big question mark how much FCMP China will continue to buy, after three years of declining imports. The Oceania processing configuration is historically geared towards FCMP in order to process the peak volumes, but this may no longer be the best way to valorize the milk, now that milk fats are sold at record high prices.
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