Butter
Price wise EU, US and APAC appear to be on three separate islands
Europe
Sell side and buy side skirmish about the H1 price
The butter price in the EU has come down to EUR 5000 ex works for spot deals. This is the lowest level in 24 months and well below the average of the past 12 months of EUR 6800. A large part of the buyside perceives the further downward potential as smaller than the upward potential, and they therefore have quite some interest to enter into forward deals for H1 and even H2. The sell side, though, is largely comfortable about their current stock levels and most sellers are right now leaning back on further forward deals, hoping that prices will come their way. Butter prices in the US and New Zealand are also dropping keeping the door open for butter imports into the EU.
Americas
US butter is very cheap
Cream continues to be very available in the US, even though the overall supply tightened up a little. With retail and food service demand remaining good the bulk butter supply has probably declined as well, but there are no hard data by lack of government reports. We are now witnessing the last push for retail and food service production of this calendar year, as the high consumption period will end after the holiday season. The spot price for butter is USD 1.46-1.47/lb (3220-3240/t) ex works, which is extremely low in a historical perspective. The number of times in the past 120 months that we reported a lower US butter price in Interfood’s Market Watch is less than ten, and most of these occurrences where during COVID when food retail demand was absent. At this almost record low price butter exports continue to thrive to all regions, from the EU to the Middle East to Asia.
Asia-Pacific
Modest downward pressure despite seasonally high supply
In comparison to the EU and particularly to the US the price drop for butter in the APAC region is modest. Strong Chinese demand is the main factor here, and branded butter continues to be sold at a premium of sometimes even USD 1000 in the Chinese market. Outside of GDT the current butter price is USD 6570 FOB even though there is sufficient product available. AMF is in much shorter supply and the offline price level is around USD 7240 FOB.
More insights
If you're interested in Butter, you may also like these topics:
