Global Dairy Trade fuels doubts on milk powder market

Compared to cheese and butter, the powder market currently feels the weakest. At the end of October, powder prices dropped somewhat, but then rose again. Skimmed milk powder rose to just €2.650 per tonne and seemed to mainly benefit from the good sentiment on the cheese and butter market, without the demand for the product having actually improved.

Support from concentrate
The relatively high prices of skimmed milk concentrate also supported the powder market. Concentrate was even more expensive than powder, which is an unhealthy situation. The question is how long the liquid market will continue to provide support. The broken weeks around Christmas are slowly but surely approaching. This will undoubtedly put pressure on the overvalued prices for spot milk and in particular skimmed milk concentrate and cream. The correction in the liquid dairy market was already expected, but has not materialized so far. However, a correction cannot be delayed for much longer, especially since the holidays fall during the week.  

Global Dairy Trade
After four rounds of increases in a row, the price of skimmed milk powder on the Global Dairy Trade fell this week, down 3,8% to $2.622 per tonne. Solarec's European product was traded the most expensively. The decline is a clear signal that the global market is also losing steam. And maybe more than that. This decline will undoubtedly also have an impact on the European market. Expressed in dollars, the European product is now the most expensive on a global scale. 

In addition, milk powder stocks in Europe are not limited, but are estimated to be more than sufficient in relation to sales. Insiders indicate that the effect of high inflation is still making itself felt in the background in the form of a drop in demand. All in all, the conclusion is that the signals on the milk powder market are no longer green for the time being.