• 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.

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.

Chicago Board of Trade (USD)

• US skim milk powder dropped last week, bucking the trend of other dairy products.

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.

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.

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