Page 60 - Food Outlook

MILK AND MILK PRODUCTS
Major Dairy Exporters and Importers
Market assessments
PRICES
The price gap between butter and other dairy commodities widens
International dairy prices strengthened between May 2016 and February 2017, primarily on continued concerns about whether export supplies in the EU and Oceania would be sufficient to meet import demand. The situation eased when it became clear that Northern Hemisphere producers have enough to export and that milk output in Oceania would be larger than anticipated. As a result, prices stabilized, with a slight downward adjustment towards March and April 2017. International price quotations for dairy products rallied from May to September, driven by increased demand for butterfat in North America and Europe. Supply constraints in Oceania and South America, together with strong import demand in Asia, also provided support. In October, the index declined by 4 percent as importers held back purchases awaiting the emerging trend for export availabilities from Oceania.
Figure 1. FAO monthly dairy price index (2002-2004=100)
In recent months, butterfat has been the dairy
commodity in highest demand in international markets,
propelling butter quotations to record highs and widening 250 its price differential relative to the other dairy products.
In contrast, quotations for skim milk powder remained
subdued, weighed down by slack demand and the
availability of ample intervention stocks in the EU.
Butter
SMP
54
FOOD OUTLOOK NOVEMBER 2017
Major Exporters Major Importers
250 220 190 160 130
2017
2015
100 JFMAMJJASOND Figure 2. FAO monthly international price indices
for butter, cheese, SMP and WMP (2002-2004=100)
550
450
350
150
50
2012
WMP
2015
Dairy Price Index
2013
Cheese
2014
2016 2017
2016