Decreasing prices of exchange products despite the shortage of milk: What will happen to the supply prices of raw materials and the recovery of production in the world

Published 2022년 7월 4일

Tridge summary

Dairy product prices, which hit record highs, are now starting to fall due to decreased consumer demand. The FAO Dairy Price Index and the GDT dairy price index have both shown a decline, with China's reduced participation in bidding contributing to the drop. Despite falling prices, the global supply of raw milk remains limited due to high feed costs and adverse weather conditions, leading to a decrease in milk production in several countries. Ukraine, however, manages to keep milk costs low due to domestic low feed prices and a blockade of ports, making its dairy products competitive. Dairy exports from Ukraine have seen an increase, with a total value of $47.4 million in the first four months, despite a 16.1% decrease compared to the same period last year.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Record prices for dairy products in the world have most likely reached their peak and are beginning to fall under the pressure of reduced consumer demand. This is evidenced by the main indices and reports of trade exchanges. Thus, in May 2022, the average value of the FAO Dairy Price Index was 141.6 points (Chart 1), which is 5.1 points (3.5%) lower than the April indicator. This is the first drop after eight months of growth, and yet this indicator is 20.5 points (16.9%) higher than in the corresponding period last year. Butter prices also fell significantly due to a drop in import demand combined with some growth in supplies from Oceania countries and limited sales in European domestic markets. Meanwhile, despite lower global import demand, cheese prices fell slightly as retail volumes remain strong and restaurant demand remains strong ahead of the Northern Hemisphere summer holidays. Chart 1. Dynamics of the price index for dairy products, % Source: FAO. The GDT dairy price ...

Source: MilkUA