FCMP
Remarkable price alignment in the three main regions
Europe
EU origins are on the brink of export revival
Sales volumes in FCMP are still high, but it appears that the buyside is quite well covered by now and supply is currently stronger than demand. This may feel like a situation where exports are required to prevent downward price pressure. In terms of prices EU product is not far from being competitive in export markets but since the EU has neglected its export game for a long time, buyers will need time to get comfortable in terms of specs and other issues. The price is still at EUR 3350-3400 ex works.
Americas
Supply tightens a little
The Latin American market for FCMP has tightened during April. Too much rain in Argentina reduced milk production in that country and the effect was felt in the entire region. Brazilian demand is good, aided by currency fluctuations in the run up to the elections that favor imported milk powder. Demand from Algeria is also expected to pick up from private parties as well as ONIL and Latin American FCMP is likely well positioned. The current price is about USD 4000 FOB Argentina, which despite being a little higher than last month is remarkable since it is about on par with the NFDM price in the US.
Asia-Pacific
Demand from SE Asia keeps the market lively
Demand in APAC remains strong, with SE Asian buyers dominating last week’s GDT. China was the second largest buyer, Chinese local milk production is allegedly a little weaker. Notable was an announcement by Fonterra to increase GDT volumes on offer in Q3, which suggests confidence in early-season milk collection. Outside of GDT the market price rose to USD 3950-4050 CIF Asia, which brings the FCMP price almost up to par with the SMP price in the region. Middle Eastern buyers are largely absent these days, as the logistical challenges are seriously hampering sourcing in Oceania.
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