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Butter: market slowly revives

August 19, 2021 12:19 PM, Der AUDITOR
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FRANKFURT/BRUSSELS. It is still quiet on the butter market due to the holiday season, but market players report that activities are slowling picking up again. Contracts are already being concluded for the Q1 of 2022.

Shortage of raw materials at the dairies

The butter market is relatively quiet due to the holiday season and milk arrivals at the dairies have also declined. The Butter and Cheese Exchange in Kempten even reports a shortage of raw milk affecting dairies and various processors. The milk powder market is slowly showing more activity again and German goods continue to be more in demand from third countries than other origins. Prices are holding steady to firm thanks to some large contracts signed, but favourable prices in neighbouring countries could lead to a downward trend. Market players report rising demand from the Middle East and contracts that already include the Q1 of 2022.

Slight price increases in Germany

As the Butter and Cheese Exchange in Kempten also states in its report, there seems to be a slight upturn in both table and bulk butter as the holidays draw to a close. While table butter is increasingly in demand in food retail, the increased presence in schools and workplaces is noticeable in bulk butter sales, which is used in canteens, for example. German table butter is currently quoted in Kempten in a price range of EUR 4.04-4.20/kg, bulk butter is quoted at EUR 3.95-4.04/kg.

Butter

Location

Preis

EXW Germany

EUR 4,000/mt

EEX

EUR 3,600/mt

GDT

USD 4,771/mt

Trade sources

EU exports show mixed picture

According to the European Commission, EU butter exports to third countries show a very mixed picture. In the period January-May 2021, total exports to third countries declined by 20% to 76,864 mt (2020: 96,544 mt). Shipments to the most important consumer country, the USA, fell by 18% to 15,298 mt, while Saudi Arabia imported as much as 60% less butter from the EU than last year, at 3,796 mt (2020: 9,415 mt). The situation is different for exports to China, which increased by a whopping 77% and amounted to 9,253 mt in the above-mentioned period.

The most important export country for deliveries within the EU remains the Netherlands, which exported a total of 75,037 mt of butter in the period January-April 2021. Germany, which is the second most important EU exporting country, delivered 8% less butter to other EU countries, and Ireland's exports also fell by 16% to 40,072 mt in this period.

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