June 17, 2014
Brazil milk prices increase 1.92% in May 2014
Brazil's milk prices have increased by 1.92% in May 2014, which is close to US$0.49/litre, according to Cepea data.
The average figure in May surpassed the 5.9% in the same period of 2013. The net average quote was US$0.46/litre in May, an increase of 2.08% compared to April 2014. The price rise is attributed to the increase observed in the Southern Brazil, mainly in Paraná, and in São Paulo.
However, the price increase may not continue in the upcoming months, according to players surveyed by Cepea. According to some companies and cooperatives, the demand for the raw material in many states have reduced due to high quotes of by-products in both the wholesale and the retail market. Cepea also observed a price drop of by-products in May, which might limit the industry's profit that has been registering raw material's price increases since March 2014. Over the last three months, milk's gross price has accumulated an 11.1% increase.
Concerning production, the Index for Milk Purchases (ICAP-Leite Cepea) moved down 2.25% in April. Production tumbled 7.07% in Santa Catarina, 3.81% in Rio Grande do Sul and 2.98% in Paraná (Southern Brazil). Milkpurchases are expected to start recovering in the South.
In the by-products wholesale market of São Paulo, falling demand has pressured UHT milk quotes in May (until May 29). The price average of this product was US$0.95/litre, 2.58% lesser than in April.