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Market Monitoring Dairy Industry: Insights May 2022
Mathieu Geuskens published on August 17, 2022
In this monthly dairy industry update, our analysts will share valuable insights about the dairy industry. This month: the trade volume of Dutch cheeses (Gouda, Maasdam, Edam) is down 2.0% in May 2022 compared to May 2021, prices are up 36.0%.
Market Monitoring of the dairy industry
Market monitoring helps agri-food companies objectively evaluate their current position within the market and the development of that position. Furthermore, it helps to spot new growth opportunities and whether the market is saturated.
For the A-INSIGHTS MarketMonitor, we analyze the global trade in dairy products on a monthly basis. Derived from local customs agencies and statistics offices, the data gives us insight into monthly trade volumes and prices for all major importers and exporters. Combined with our sector expertise, we can provide you with an up-to-date view of the developments in the global dairy market.
Continued supply pressure drives a 36% year-over-year average trading price increase in May
The reduced milk supply in Western Europe continues to boost the price levels of Dutch cheeses (Gouda, Edam, Maasdam) in May 2022. On average, trade prices for these cheeses were up 36% compared to May 2021, with trade volumes down 2%. Year-to-date, prices are up 26.6% and volumes down 4.5%, showing that volumes have partially recovered in recent months.
The price pressure and volume decline are in line with raw milk deliveries in major production countries the Netherlands and Germany, which were down 2.0% and 1.7% respectively for the first five months of 2022 according to a milk market situation report from the European Commission.
Figure 1. Total export Dutch cheeses (Gouda, Edam, Maasdam) year-to-date until May, tonnes and €/kg
Price gap between Netherlands and German exports shrinks, but volumes remain relatively stable for top exporters
The recent price pressure has closed part of the gap between export prices for the Netherlands and Germany in the months. In May 2022, the average export price for the Netherlands is €0.28/kg higher than that of Germany (5.6%), down from €0.84/kg (25.8%) in May 2021. The closing price gap highlights the susceptibility to cost inflation of lower-priced German products compared to cheese exported by the Netherlands.
The closed price gap appears to normalize the volume developments of both countries, with Netherlands cheese export volume down 664 tonnes (1.7%) in May, compared to the 86 tonnes (0.3%) volume increase in German exports. This is a substantial difference from previous months: in April, Netherlands exports were down 1,251 tonnes whilst German exports were up 1,291 tonnes, and in March the difference was even bigger with a 7,249 ton export decline for the Netherlands and a 521 ton export decline for Germany. This implies that the closing price gap is restoring the competititive position of the Netherlands in international cheese trade.
Figure 2. Top 5 exporters Dutch cheeses (Gouda, Edam, Maasdam) May, tonnes and €/kg
Minor import increases at most importers, volume decline mainly driven by Japan and Chile
With import volumes increasing slightly for most substantial importers of Gouda, Maasdam, and Edam, the majority of volume decline can be found in Japan (-38.1%) and Chile (-62.9%). Imports by Japan have declined steadily in 2022 after record imports in 2021, but where this seemed to be a normalization of import at first, sustained volume and lower year-to-date volumes decline suggests that demand has softened. Chile's import volumes fluctuate substantially over the past years, but as the year-to-date volume is down by over 50%, this also appears to be a softened demand.
Figure 3. Top 10 importers Dutch cheeses (Gouda, Edam, Maasdam) May, tonnes and €/kg
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