Mixed sentiment reported within the milk powder market
The SMP market sentiment remained mixed during this week’s assessment period (4th May 2023 16:00 BST – 11th May 2023 15:59:59 BST), and no clear price direction was indicated during the week, with the price trading around the previous week’s level. Traders remain the primary participants in the market, as processors remain reluctant to sell large volumes, and end users remain off the market, postponing buying decisions. Market activity on the international market remains mixed. While the Asian market continues to indicate sluggish demand, buying interest from North Africa and the Middle East is still a market feature.
During the past week, the Algerian buying agency, Office National Interprofessional du Lait et des Produits Laitiers (ONIL), issued a new tender for SMP and WMP for delivery in Q3. The tender closed on Thursday, 4th May, and prices for SMP have been reported around €2,400/mt EXW EU.
One market source commented, “we are surprised about the price levels the ONIL tender closed at; the spot market is already trading around these levels. During Q3, the supply and production of SMP usually reduces due to a tighter supply of liquid SMC. This closing level does not add any bullish pressure to the market as expected with the announcement of the tender.”
For reference, the MBP for Skimmed Milk Powder EXW Europe [Mintec Code: J117] was assessed at €2,400/mt on 11th May, up 3% on the week.
The MBP for Whole Milk Powder spray EXW Europe [Mintec Code: J118] was last assessed on 11th May at €3,325/mt, unchanged week-on-week.
The market sentiment for European WMP stayed mixed this week, with prices remaining around previous weeks’ levels. As seen during previous weeks, market activity and buying interest for European WMP were limited. Chocolate manufacturers, the largest constituent of the buy side for WMP in the EU, are currently in an off-season of production, reducing their production, thus negatively impacting WMP demand. The majority of WMP dealt in the ONIL tender was reportedly supplied from New Zealand, even though some volumes have been covered by European market participants. Prices have been reported to be below $4,000/mt CFR Algeria for delivery Q3.
Sandro Schulz Mintec Dairy & Pork Analyst
+49 15510 096845 sandro.schulz@mintecglobal.com