4 October 2011

2 minute read

Rabobank expect Chinese buyers to return to the market over the coming months as stock levels reduce following a build up earlier this year and local milk prices remain strong. Similarly, Russia is expected to return to the market albeit at a lower level than the corresponding period last year due to ongoing concerns over a milk supply deficit.

Elsewhere, Rabobank expects firm import demand in the Middle East, North Africa, South East Asia and Brazil.

In terms of supplies, some EU states are expected to reduce output in the last quarter in an effort to avoid being over quota. This combined with feed costs remaining strong and some easing in producer prices is expected to leave growth at just one per cent for the final quarter of 2011.

Similarly, growth of just one per cent in milk supply is expected in the US for the quarter. However, slower demand in both regions is expected by Rabobank to result in relatively strong export availability.

NZ milk supplies are forecast by Rabobank to rise by five per cent relative to last year over the final quarter as 2010 levels were low and new producers continue to come on stream.

Most of the increase is expected to come in the form of WMP.

Elsewhere, increased output in Australia and Argentina during the last quarter should offset falling Brazilian output, which will allow Brazil soak up larger import volumes.

TheCattleSite News Desk