- COVID cases are rising in parts of China.
- This could hit the country’s catering industry.
- Europe and America are benefitting from China’s slow production as Chinese pastures are hit by disease.
Disease Hits China’s Dairy Market
- COVID cases are rising in Northern China, which means the catering industry could be hit hard again.
- Nevertheless, we think a flurry of European and American dairy products will enter the Chinese market soon, given the price advantages.
- Domestic milk production is slowing, with some of the country’s cow herd suffering from sarcoidosis.
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New Zealand Futures and Options Exchange (USD/mt)
- New Zealand’s butter and milk prices rallied significantly last week.
- The country’s cheese supply has therefore reduced at the expense of both butter and skim milk powder.
- New Zealand’s October milk production was still lower year-on-year.
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Chicago Board of Trade (USD)
- US skim milk powder dropped last week, bucking the trend of other dairy products.
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Eurex (EUR/mt)
- Europe’s butter prices are chopping sideways after rallying for weeks.
- Its skim milk powder prices are starting to increase, and China’s have climbed in tandem.
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Dairy Prices in the Major Markets (USD/mt)
- Europe’s prices are higher than others after an eventful October.
- The risks are starting to accumulate, though, especially for butter and skim milk powder.
- We hold bearish view on prices for both products in Q4’21 and Q1’22.
- European skim milk powder, New Zealand milk powder and butter should hold their momentum in the next GDT auction.
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Other Opinions You May Be Interested In…
- NEW! Dairy Prices Soar on Energy Shortage
- Czapp Explains: Skimmed Milk Powder vs. Whole Milk Powder
- New Zealand Dairy Producers Strive to Fill European Supply Gap
- Dairy Suppliers in Oceania Benefit from Tight Asian Supply
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