FCMP
Latin America and Oceania compete for export business
Europe
Small market
The FCMP market in the EU is slow and the demand side is largely done for this year. Suppliers are offering a little more in an attempt to get some relief from the declining butter prices. At the current market price of EUR 3300-3400 ex works customers only buy small quantities. The world market remains out of reach for EU producers.
Americas
Strong supply puts prices under pressure
The FCMP market in Latin America is loosening quickly as production volumes in Argentina and Uruguay are good at the moment and the expectations for the upcoming flush are very positive. In reaction to the price fall on the early July GDT the downward price correction in Latin America is likely to continue. During June the prices have been falling on a weekly basis already and have probably further downward potential below the current level of USD 3650 FOB. ONIL finally appeared a few weeks ago but it mainly absorbed NZ FCMP. This leaves the Latin American market oversupplied with the main outlet being Brazil, where the buyside feels that it is in the drivers’ seat and therefore takes it easy. An opportunity to sell product may come from Algerian private parties, which are expected to come to the market any time soon, but it remains uncertain when they will receive their import licenses.
Asia-Pacific
Downward price pressure is building as China remains well supplied
The global FCMP market remains heavily dependent on Oceania supply and Chinese demand. Imports into China in the past year have been strong, resulting in elevated inventory levels in the entire supply chain. This is likely to limit the import requirements in the coming months, bringing some uncertainty to the FCMP market. Further downward price pressure can therefore not be ruled out as suppliers will compete for alternative outlets. Current market indications outside GDT are about USD 3550 FOB NZ.
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