July 8, 2014
Brazil sees 0.73% drop in milk prices during May-June 2014
Brazil''s milk prices have fallen by 0.73% from May to June 2014, and closed at US$0.50 per litre, according to a research by Cepea.
The gross price closed at US$0.49/litre, for a drop of 0.56% compared to the average in May 2014. The downward scenario, which was already expected by the sector, is a result of a reduction in the pace of by-products'' trades in May and a practically stable milkproduction in June.
Players, surveyed by Cepea, say that the delay of cold temperatures in Brazil this year, a smaller economy growth and high price levels of by-products have affected the consumption of dairy products.
Among states surveyed by Cepea, Minas Gerais and Goias registered significant price decreases of 2.03% and 3.53%, respectively, considering net values paid to producers. Other states have registered price rises.
The Index for Milk Purchases (ICAP-Leite Cepea) remained practically stable in May, falling only 0.05%. Due to supply and the beginning of winter forage for animals in the south, milk purchases in some states have risen up to 3.85. The exception was Parana, where the decrease was 2.03%.
Players expect production increase in the south in the upcoming months. On the other hand, a significant decrease is expected in the central and southeast regions in Brazil due to a prolonged dry weather since early 2014.
Considering by-products, quotes rose in June, due to the recovery of part of the liquidity, which was smaller in May. Monthly averages in the wholesale market of Sao Paulo for UHT milk and mozzarella cheese have moved up 4.79% and 0.56% in relation to May 2014.