Rabobank: Global dairy market prices will depend on Chinese import demand

According to Rabobank, MILK prices are rising, but farm margins around the world are still patchy. This is due to high feed prices, overall costs, but in the end, it is the price of raw milk that can withstand the pressure of rising costs.

In most parts of the world, milk prices cover the costs. However, Rabobank dairy analyst Ben Lane notes that in the EU, milk prices are barely keeping up with rising production costs.

We can't wait for price relief in the feed market: the US has already reported that the corn crop was significantly smaller as a result of a prolonged drought, and the soybean crop will also be much lower than expected. Market conditions for grains and legumes are still holding prices high in a number of countries, although additional growth potential is constrained by limited demand.

Logistics disruptions continue, transport costs are skyrocketing, and shipping container availability is creating additional pressure for exporters.

“However, despite the problems with logistics, dairy products continue to ply the world market,” emphasizes Laine.

In CHINA, supply is outpacing demand, with rising domestic production coupled with increased inventories. These factors indicate that it is possible that at the end of this year and in 2022, China will implement a policy of reducing inventories.

- The peak of world prices for dairy products is probably behind us. Prices declined in the second quarter and will be highly dependent on import demand until the end of this year, with all eyes on China as the main source of downside risk, Rabobank concludes.

dairynews.ru