FCMP
There is a lot of product in Latin America and Oceania
Europe
Buyers are hard to find
In line with the gradual decline in price for EU FCMP in the past few weeks there was quite some action from buyers in the last weeks of September. However, at the current price of EUR 3550-3650 ex works there is more sell side interest than the demand side can absorb. The cocoa prices have come off a little which generated some hope for better times for the chocolate industry but those buyers remain cautious in their procurement of ingredients. Atypically for this time of the year some processors have to produce FCMP that is not yet ordered. At the current price EU FCMP does not have access to the world market, but the gap with Latin America and New Zealand is closing.
Americas
Strong supply begins to create price pressure
Argentina and Uruguay are reporting double digit growth rates for milk production. At the current price of USD 3700 FOB the market has been able to absorb the supply pressure remarkably well. Latin America is for many importers the most competitive origin and this has been compensating for the weak Brazilian demand. And let’s not forget that last months’ ONIL purchases played an important role in stabilizing the Latin American market for Q4. Going forward, though, the downward price pressure is likely to build as losing access to the export markets is an absolute no go.
Asia-Pacific
Downward price pressure continues
The FCMP market in APAC is experiencing more price pressure than the SMP market. This is logical seeing that we come from much higher price levels connected with the expensive milk fat content. Sales volumes on GDT are up and still there are remarkably sharp off-line offers, which lead to bearish sentiment at the buyside. China appears to be tightly supplied for the remainder of the year, which may well be the only upside that can currently be found in the APAC FCMP market. The price is USD 3680 FOB at the moment.
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