FCMP
Relatively tight supply creates tension in some regions
Europe
EU market remains disconnected
The EU FCMP market is actually quite stable, as the upward price movement of the protein content and the downward pressure of the fat content level each other out. FCMP is traded at about EUR 3900-3950 ex works for Western EU material, whilst prices in Poland are above EUR 4000. As is obvious at these levels the EU has no role to play on the export markets, and product is generally only made when a sales order has been secured.
Americas
Stable market still
Milk production in Argentina and Uruguay remains good but the growth versus last year’s strong comparables becomes smaller. Production circumstances are quite alright although it is a little dry. El Niño has not hit yet, but the effects may become apparent as of Q1. This may explain the current reluctance to sell that the supply side displays. With Brazil going into the elections the import demand has gone quiet, but Algerian private parties have finally received their import licenses and this has led to a wave of demand. Overall the FCMP price has been relatively stable at around USD 3750-3800 FOB for Q4 delivery. Going forward the downward momentum has evaporated.
Asia-Pacific
Price appreciates during peak season
Demand for FCMP in APAC is good and despite the seasonally high volumes on offer on GDT the price increased to USD 3800-3900 FOB. FCMP supply is being balanced against the production of MPCs and cheese/WPC that generate superior valorization of the milk proteins. A disruptive force on the demand side may be the uncertainties regarding Indonesian import demand going forward, for FCMP but also for SMP. The school milk program has recently been put on hold, which frees up significant volumes of fresh locally produced milk for local manufacturers. Even more complicating for trade flows are the Halal inspection measures that have been announced. As a major regional importer, changes in Indonesian demand will not go unnoticed, but the effects are far from clear yet.
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