Mel's Market Report December 2019
Whey – this market continues to maintain strong demand with limited availability out of UK and Irish sources.
SMP - Prices continue to rise with strong global demand for product from the European markets Q4/Q1 trading levels are high with no reprieve in sight until first flush.
Butter – continues to be pretty flat, with futures trading higher into 2020 but the physical market is not actually trading at the same levels. Stock is still available as demand has not yet come back which could be the reason for the static levels. Cream is trading upward across Europe so there is limited fresh production on butter right now.
OILS AND FATS
Rapeseed – firmed again last week also supported by gains in the palm oil and crude oil markets. Supply is already tight and with summer planting estimated to be 8% lower this has only added pressure to an already strained market.
Palm – oil prices continue to rise due to crop reports and the prospect over a slowdown in palm oil production next year! Recent data is showing that exports are growing and stocks will start to reduce amid the expected fall. The Malaysian Palm Oil Board issued an October report which supported the sentiment as it showed production and stocks below market estimates and exports above estimates. No good news here.
Currants – the Greek crop is of a much better quality this year with volumes exceeding 22,000 tonnes. Pricing has already show signs of easing.
Sultanas – this market remains relatively firm despite the larger 2019 harvest. The official crop estimation was 300,000mt but this now looks a little conservative. An additional 20,000mt has been dried down making the overall total 320,000mt. There was no carry over from the previous year so we are solely reliant on new crop to cover demand. The buoyant pricing is being maintained by the TMO which is the Turkish governmental organisation. Every time the market shows signs of weakness they buy 1000’s of tonnes to tighten supply and push the price back up!
This pattern is expected to continue into April at which point there will be a better idea of how the new crop is progressing as the frost risk will have passed. If the new crop is still strong this should be the point we will see the most significant shift in the market. The TMO will either buy more to support the price or with the pressure of new crop, prices could ease back!