Slow recovery in global dairy commodity prices expected
Market & Price Trends
Published Dec 6, 2023
Rabobank warns that while the bottom in dairy commodity markets has passed, a slow recovery is expected as prices return to long-term averages. Limited milk supply growth and lackluster demand were factors that led to soft commodity pricing this year. The bank also highlights the risk of price volatility and uncertainty in global markets, as well as challenges in dairy demand and milk supply for the future.
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The bank’s latest Global Dairy Quarterly report highlights that limited milk supply growth and “lackluster” demand led to soft commodity pricing this year but the bank expects prices to “move higher” next year. EU dairy commodity prices have strengthened from mid-August to mid-November it also noted. “The base case is for a slow recovery in commodity prices. “However current fundamentals provide the perfect ingredients for price volatility and a possible market whiplash. “A high degree of risk and uncertainty permeates all global markets include dairy,” the report outlined. Advertisement Rabobank said any recovery in commodity prices will be against a backdrop of “geopolitical instability risks, volatile energy markets and weak macroeconomic conditions”. Dairy demand It also highlighted that demand will be a key factor to monitor next year with key challenges remaining on the horizon including high dairy inflation. According to the latest Rabobank report China’s import appetite ...