Exporters are focussed on product sales generated from manufacture during the main milk production season. Demand is reported to be strong from all regions, although some buyers are reluctant to lock in contracts for later delivery at current prices levels.
Global milk supplies remain very tight and a slower than normal start to the production season in New Zealand and/or Australia is likely to result in upward pressure on prices. Production in the US, particularly in the state of California, is being hampered by the hot dry weather. 93% of California is currently in a state of severe drought.
European prices remain very firm as they move into their summer holiday period. Spot butter prices eased a little this week in this market but they still remain way above prices seen elsewhere in the world. The strong prices in Europe are prompting countries such as Russia to source butter from outside of the EU.
