Whole Milk Powder (Standardized)

Market Dynamics Report on Whole Milk Powder

I. International Market Dynamics
1. New Zealand Market
- Price: Auction prices for whole milk powder rose by 2.5% week-on-week to USD 3,850/ton (FOB).
- Supply: Milk supply in main producing areas is tight. Seasonal factors have led to reduced output at dairy farms, and processing plant inventories are declining.
- Demand: Chinese importers have increased purchasing volumes, and restocking demand has emerged in the Southeast Asian market.

2. European Union Market
- Price: Spot prices for whole milk powder in Europe remain stable at EUR 3,700–3,800/ton. Some brands have implemented slight price increases due to rising logistics costs.
- Supply: Milk production in major producing countries such as France and Germany decreased by 5% year-on-year. Rising energy costs have forced some processing plants to reduce output.
- Demand: Orders from the Middle East increased by 10% month-on-month. However, domestic European demand remains weak, leading to slow inventory clearance.

3. United States Market
- Price: Export quotes for whole milk powder rose to USD 3,900/ton (CIF Asia), a 3% increase month-on-month.
- Supply: The national dairy cow inventory decreased by 2% year-on-year. Tight raw milk supply has led processing plants to prioritize domestic demand.
- Demand: Asian buyers are actively inquiring, but actual transactions are constrained by high prices.

II. Domestic Market Dynamics
1. Price Trends
- Domestic spot prices for whole milk powder range from CNY 32,000 to 33,500/ton, representing a 1.2% week-on-week increase.
- Import cost inversion is worsening. The CIF price of whole milk powder imported from New Zealand converts to approximately CNY 34,000/ton, providing support for domestic prices.

2. Supply Conditions
- Large domestic dairy enterprises are operating with low inventory levels, while small and medium-sized enterprises are purchasing on a needs basis. Market circulation of goods is tight.
- Import Volume: Whole milk powder imports in September decreased by 8% year-on-year, primarily due to high international prices and shipping delays.

3. Demand Performance
- Downstream Industries: Demand from the baking and dairy processing industries remains stable, but procurement volumes decreased by 5% year-on-year due to cost pressures.
- Substitutes: The price advantage of skim milk powder has become apparent, leading some enterprises to adjust formulations and reduce the usage of whole milk powder.

III. Relevant Influencing Factors
1. Raw Material Costs
- A decline in global dairy cow inventories has led to tight raw milk supply, driving up the production costs of whole milk powder.
- High feed prices (corn, soybeans) continue to compress profit margins for dairy farms.

2. Exchange Rate Fluctuations
- The depreciation of the RMB against the US dollar has increased import costs, supporting domestic prices.

3. Policy Impacts
- China maintains a zero tariff on dairy imports from New Zealand. However, tightened EU dairy import quotas are affecting the supply structure.

IV. Analysis and Judgment
1. Short-term (1–2 weeks)
- International auction prices are expected to remain volatile at high levels. The tight supply situation in New Zealand is unlikely to change in the short term, and domestic prices are likely to rise rather than fall due to cost support.
- Demand Side: Downstream enterprises may release phased restocking demand, but high prices will inhibit large-scale purchasing.

2. Medium-term (1–3 months)
- Supply Side: As the Northern Hemisphere enters the peak milk production season (October–December), milk production in the EU and the US may gradually recover, alleviating supply pressures.
- Demand Side: Pre-Spring Festival restocking demand may boost the market, but intensified competition from substitutes may limit price increases.

3. Long-term (3–6 months)
- Price trends will depend on the speed of global milk source recovery and the recovery of demand. If energy costs remain high, whole milk powder prices may sustain medium-to-high levels.

V. Forecast
1. Price Range
- Domestic Spot Price: Short-term CNY 32,500–34,000/ton; Medium-term CNY 32,000–33,500/ton.
- International Auction Price: The auction price for New Zealand whole milk powder in the next round is projected to rise to USD 3,900–4,000/ton.

2. Risk Warnings
- The resurgence of global pandemics may affect logistics and demand.
- Significant exchange rate fluctuations may increase uncertainty in import costs.
- The increasing market penetration of substitutes (such as plant-based milk powders) may suppress demand.