Milk powder market refuels confidence

The price of skimmed milk powder is now back above €2.300 per tonne, while a few weeks ago there was talk that the psychological bottom of €2.000 would not hold. The revival is a result of increasing purchasing interest, various parties indicate. Apparently, buyers have realized that the current price levels are not bad for securing volumes in the long term.   

Export figures
Sales outside Europe are also not disappointing on paper, according to figures from Eurostat. The sentiment among trading houses and producers is sometimes experienced differently. Since February, European export figures for skimmed milk powder have been above last year's levels. In the first seven months, European export volume recorded an increase of more than 2% to 3,5 million tons. This increase is of course not much, but production volumes are also somewhat lower across Europe.

China is purchasing lower volumes due to the economic downturn, but sales to a country like Algeria compensate for this. The export volumes of whey powder are also above last year's level. It is good to realize that the milk powder market was characterized by scarcity last year and therefore less product could be exported. When we compare the export volumes with the record year 2021, there has been a significant decline.

Correction up
All in all, the conclusion seems to be that the milk powder market has been talked down too much in recent months, and an upward correction is now taking place. Price increases of up to €2.500 per ton appear to be possible. The market is supported by the seasonal decline in milk supply. It is said that a lot of milk goes into the cheese bin, as this provides the best valorisation. At the same time, milk powder stocks are still described as ample.