Lactose
Can demand for standardization keep up going forward?
Europe
Demand for standardization remains strong but EU origins may need export demand soon
Strong demand for standardization still lifts the lactose market to higher levels but with the Northern hemisphere getting out of season questions arise if demand can sustain the current price of EUR 1550–1600 ex works going forward. What is interesting for EU origins is that the gap with US product narrowed in export markets. Prices are now almost on par.
Americas
US lactose market is active but seeks direction
The market turned very firm by the end of June but in early July some more offers became available. The gap between product sold domestically and export quality narrowed a bit. Prices of premium product are at USD 0.75/lb (1655/t) whereas local product now trades at USD 0.70/lb (1545/t) ex works. Demand for standardization in the Southern hemisphere is expected to be good at the start of the new season so downward risk appears to be limited.
Asia-Pacific
Slow demand in the off season
The APAC market is quiet, which makes sense as regional supply is at the seasonal low point. Outside of GDT there is hardly any Oceania supply and on GDT the sales volumes are small. This also makes it difficult to get a sense for the market, as the price that forms on GDT is susceptible to one or two buyers that are in urgent need of product. Most buyers in the region can afford to wait until Oceanian supply ramps up seasonally towards the peak levels in November. The biggest players have built security stocks when the situation around the Hormuz strait began to escalate. The current price level is about USD 3500 FOB for Oceania product. EU powder, though very competitively priced at levels of about 3200-3300 CIF Asia, continues to be met with hesitance from the buyside as factory approvals have generally expired due to the EUs long absence on the export markets.
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