Market conditions in Argentina are reported as steadily improving, and new export opportunities are emerging. For instance, Argentina exported milk caramel (dulce de leche) to Japan for the first time.

UHT milk in Brazil is still experiencing resistance from buyers, and prices continue to decrease. Hence stocks are starting to build in several plants.

In general, Brazil is depending less on imports from nearby countries, such as Argentina and Uruguay, except for cheese and SMP. The overall retail demand for dairy products is expected to remain weak in the short and medium term.

WMP production is very active in South America, while stocks are steadily building. WMP export prices adjusted lower as the current WMP supply is above its demand. Brazil continues importing lower amounts of WMP from Argentina and Uruguay and paying a lower premium compared to a month ago. A higher volume of milk is expected for drying in the domestic Brazilian market, encouraging the expectation among buyers of lower WMP values. WMP exports from Mercosur to Algeria and Russia are relatively strong, but prices are considerably lower.

SMP production is less active in South America, since most processors are focusing on WMP. Inventories are less available, and export prices adjusted higher. However, this scenario could change in the near future as the SMP market is very volatile. SMP exports to Brazil have been improving.

clal.it