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Market comments milkprices Summer 2014

In the EU-28 milk supplies over the first five months of 2014 was 5.3% higher than the same period last year.

At this time the market is in summer holiday mood. Milk production remains strong by seasonal standards, driven by high farm gate prices and good weather conditions worldwide. But as export demand is declining ,market has become vulnerable and threatens to get out of balance. Market sentiment has turned negative as prices are coming under pressure. Most important trigger was the build-up of stocks in China and falling demand in some emerging markets in response to high dairy commodity prices. 

Chinese demand in the world market remained suppressed as they have accumulated more than sufficient stocks and are now reducing forward purchasing. Supply and demand balance is vulnerable. Much will depend on the size of the milk output growth for the second half of the year and the export opportunities.

On the GlobalDairyTrade auctions prices made a big decline during June and July. From the start of this year WMP prices have fallen as much as 35%.This development is also reflected in the EU market. Since July prices are caught in a downward trend.
The only bright spot is the cheese market ,where the recent price recovery seems to consolidate.

Source: Agripress    02:23:00|07/08/2014