free trade agreement
Mercosur and China seeking a free trade agreement
In Paraguay and Uruguay several dairy farmers have reported wet and muddy conditions. Elsewhere in South America rain showers are providing moisture for wheat and other crops, with a minimal impact on the main dairy basins.
In Argentina milk production is boosted by the cooling temperatures, as winter begins.
Milk production is unsteady in Uruguay, where several dairy producers continue to struggle with muddy conditions. Cheese and butter manufacturing remains relatively strong, while export trades to Brazil, Algeria, and Russia remain active.
Milk transportation is starting to return to normal in Brazil, with the end of the 10-day truck drivers' strike due to the high cost of diesel. Dairy imports continue to increase, however at a lower level than the previous year.
The Mercosur and China are currently seeking a free trade agreement. Starting from June 18, Uruguay took over the rotating presidency of Mercosur. The Export of WMP from Uruguay towards China increased from 200 tons in the period Jan-Apr 2017 to 3.088 tons in the period Jan-Apr 2018.
SMP export prices are slightly down in South America: SMP processing has been active, while inventories are steady to building.
WMP export prices adjusted slightly lower on the bottom, but slightly higher on the top, widening the range. On one hand, higher milk availability supported WMP production, forcing some manufacturers to drop prices to be more competitive. On the other hand, a few buyers paid a premium to secure the product to be delivered by the end of the truckers' strike in Brazil, which delayed WMP deliveries.