Butter price is also skyrocketing in wartime

The day after the war, butter prices in Europe took another step back, but the sentiment is now clear bullish. The prices are really skyrocketing. The futures market rose by around €500 in recent days and passed the €8 per tonne mark on Tuesday, March 6.500. Prices are also rising rapidly in physical trade and these types of price levels are being achieved. The advance has occurred in recent days and is therefore not yet included in DCA's butter quotation.

Panic in the market 
The price increase is unexpected and has no apparent reason. Market participants point to the war between Russia and Ukraine. Although both countries do not play a significant role in the butter, panic has broken out in the market. Large customers such as bakeries seem to be choosing their money's worth and chasing volumes. So old-fashioned hoarding behavior.

Naturally, the price revival is also fodder for speculators who try to build up volumes in the hope of further price increases. They are not bothered by the fact that butter prices are already sky-high in a historical context. Other food commodities are also popular in wartime. For example, pork prices have also risen sharply - for no apparent reason.

Unpredictable market
What also plays a role, of course, is that butter supplies have been tight for some time. Now that buyers are trying to cover themselves en masse, this is coming into the spotlight even more. On the other hand, milk supply is increasing again seasonally, but this is currently unable to dampen the current price rally. Prices are expected to rise further in the coming days. In that case, the price record from 2017 will also be in sight. Then prices touched €7.000 per tonne.

Other dairy products, such as milk powder, are also on the rise. At the moment it is difficult to say where the advance will stop. Developments in Ukraine and Russia are erratic and predictable. And so does the butter market.