During the period January to August 2014, there are virus concerns in Europe and the US, (Bluetongue and Avian Flu) but the supply outlook is unchanged – i.e. global flows will turn positive, but annual output will be flat. However, the virus’s long-term impact is unclear and could be offset by improving margins and growth in France and Poland.
Demand indicators are adequate, but with buyers carrying less stock, the market has been sensitive to demand surges. Indeed, a demand surge pushed commodity prices higher in August. After lifting further in early September, pricing stabilised.
Reports suggest buyers still need to conclude business and fundamentals look solid. Though activity usually quietens in quarter four and futures are weaker. Price stability should stimulate buying activity, but with most European dairy commodities now at a premium, some convergence with global levels may occur.
Ornua Milk Report – October 2024
