SMP
Competition heats up between EU and New Zealand
Europe
EU exports keep the market afloat
EU SMP is becoming competitive at the world market, with some support from the EUR/USD exchange rate. At the current market price of EUR 2500-2550 ex works there is sufficient appetite to keep the European market active, but demand in general is not strong enough to generate upward price potential. Second tier or non-export grade powder occasionally changes hands at a EUR 100 discount when a party needs to clear inventory in a hurry. In general, though, the sell side is relaxed given the limited availability of milk at this time of the year. Milk supply in the UK is growing already which pushes the local market price in the direction of EUR 2400 ex works.
Americas
Local market tightness limits availability for export markets
The NFDM price level is overall stable at USD 1.40-1.42/lb (3085-3130/t) ex works for prompt delivery and the tightness in the market persists. Avian Flu continues to curb Californian milk output in particular which is a major factor in the current tight market conditions. Still, the general assumption is that the market will loosen as the new season approaches. SMP production declined considerably in November as it is focused on the needs of the domestic and Central American buyers which are geared towards NFDM rather than SMP. Mexican demand remains as yet focused on short term requirements only.
Asia-Pacific
Competition with EU product in the Middle East
The SMP market in APAC is a challenge to read, with buyers shortly covered because of their continued hand to mouth purchasing strategy. At the current price level EU powder is becoming competitive, as it is on par with Oceania offers in some importing countries which employ a 5% import duty for EU product. Nevertheless, Fonterra powder remains preferred for quite a few parties in the APAC region, as the buying interest on GDT proved clearly. At the first GDT of 2025 the price of SMP did not lose too much of its ground and post GDT the market price is about USD 2750 FOB. There is buying interest in the second week of January for the remainder of Q1. Most activity is in the Middle East where EU powder is being offered relatively cheap compared to Oceanian SMP.
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