27 Oct 2014 10 37 AM
posted by Richard Rolfe
The following article will help explain some of the reason for the global milk surplus and the drop in price. As we have mentioned before both China and Russia are big importers of Dairy produts and when both of these are out of the market this has a big impact. Once these two become buyers again then the markets will swing in the other direction. The mid term view is that demand will outstrip supply globally and that will see a positive for the milk price.
China’s WMP imports have fallen below year earlier levels for the first time since August 2013. In September 2014, the country imported 9,400 tonnes of WMP, compared to 25,600 tonnes in September 2013. Imports this year have been on a declining trend following a surge of buying at the turn of the year, which eventually reached record levels in January 2014. On a cumulative basis (Jan-Sept), WMP and SMP imports are 56% and 35% higher respectively, when compared with the same period in 2013. China’s milk powder imports have displayed a degree of seasonality in previous years and tend to increase in the final quarter of the year, but potential stockpiling could impact on the trend this year.
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