Anhydrous Milk Fat Price Trend and Forecast

Regional Price Overview

Get the latest insights on price movement and trend analysis of Anhydrous Milk Fat in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Anhydrous Milk Fat Price Trend for the Second Half of 2023

Anhydrous milk fat has a unique composition, which primarily consists of saturated fatty acids. This distinct feature is well exploited in the food industry to enhance the texture, flavor, and consistency of food products. In addition to this, its stable shelf life and ease of storage also make it a preferred choice of manufacturers.

Anhydrous Milk Fat Price Chart

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The above-stated factors supported the rise in the prices of anhydrous milk fat during the third and fourth quarters of 2023. The prices saw a consistent rise as the anhydrous milk fat market witnessed the most significant jump among several dairy products.

The hike in prices came from rising global food inflation and consecutive inclination in dairy product demand. Additionally, the disruption of supply chains due to the blockage of the Red Sea route and drought in Panama Canal resulted in quick depletion in the inventories; however, the consumer interest in this sector kept on rising, and thus, the traders had a window of inclining the prices of anhydrous milk fat during the end two quarters of 2023.

Analyst Insight

According to Procurement Resource, the price of Anhydrous Milk Fat is expected to rise further as the global demand is increasing at a quicker pace than the production rate, increasing the gap between supply and procurement.

Anhydrous Milk Fat Price Trend for the First Half of 2023

The first two quarters of 2023 were unfavorable for the hike in the prices of anhydrous milk fat. The prices of anhydrous milk fat, even when the price of many other foods continued to rise at double-digit rates, have dropped significantly. Rising food prices have replaced falling energy prices as the primary cause of inflation for consumers in the European region.

Its decline was due to decreased energy and cattle feed prices, as well as lower consumption, which resulted in a surplus of milk output starting from the initial months of the first quarter of 2023. More downward pressure on wholesale prices, which have been declining globally since last summer, is anticipated eventually as demand declines. These decreased wholesale prices, along with declining energy and material expenses, kept the price trend of anhydrous milk fat in the negative zone.

Analyst Insight

According to Procurement Resource, the price trend of Anhydrous Milk Fat is expected to show a mixed trend. The demand sector for anhydrous milk fat seems weak, and along with the fall in the prices, the trend of anhydrous milk fat is estimated to remain uncertain.

Anhydrous Milk Fat Price Trend for the Second Half of 2022

Asia

H2 2022 witnessed very mixed price trend for anhydrous milk fat. Despite being the biggest producer in the world, India’s dairy imports are on the rise. The milk and related product prices in the Indian market remained anchored. H2 2022 closed with somewhat stagnant price patterns.

Europe

Europe faced the worst economic crisis in 2022. The Russia-Ukraine war impacted the economy and purchasing powers of individuals. Energy prices and the cost of living skyrocketed. Anhydrous milk fat remained on an upward trajectory. Q3 continued to witness a steep rise in Anhydrous milk fat prices whereas trend improved a little in Q4 as supply chains normalized, but still, the prices remained high comparatively.

North America

With high rising inflation and declining milk production rate, the anhydrous milk fat price trend in North America remained high. The year-on-year milk production in the USA has been on a decline, so lesser supplies, high inflation, and sustained demand kept the price trend for anhydrous milk fat afloat. As the year-end approached, improved connectivity called for some low-rising peaks in the prices of anhydrous milk fat.

Analyst Insight

According to Procurement Resource, the anhydrous milk fat is going to show a mixed price trend, considering the rising consumption and equally stagnant production. Hence, the prices are expected to remain high swinging.

Anhydrous Milk Fat Price Trend For the First Half of 2022

Asia

The price of anhydrous milk fat remained strong during the first quarter in the Asia-pacific region. In January, the prices averaged 6668 USD/MT and reached the highest levels in March, averaging 7111 USD/MT owing to the soaring commodities prices due to the Russia- Ukraine conflict. The trade bottlenecks, supply-side constraints, and thinning inventories supported the higher prices. However, the prices began to stabilize, registering a slight decline. The cost of anhydrous milk fat went from 6802 USD/MT in May to 5913 USD/MT in June 2022. This decline resulted from the market’s demand destruction amid abnormal inflation.

Europe

The Russian invasion of Ukraine created huge volatility in the European market with strong reverberations across the milk sector. Farmgate milk prices went from 45.96 Euro/100kg in April to 48.52 Euro/100kg in June 2022. These inflated prices of food and feed impacted the price trend for anhydrous milk fat resulting in higher prices. The prices of anhydrous milk fat went from 5800 Euro/MT in January to 6981 Euro/MT in June 2022.

North America

The US dairy and allied sectors struggled to maintain a constant supply due to surging feed costs, trade bottlenecks and labour shortages. The butter and farmgate milk prices averaged 6008 USD/MT and 27.30 USD/CWT respectively in June. These high feedstock prices strengthened the prices of anhydrous milk fat in the US domestic market.

Procurement Resource provides latest prices of Anhydrous Milk Fat. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.