The recent changes in the EUR/USD exchange rate are already making waves across the global dairy market. In the past week, a subtle but significant shift from 1.17 to 1.15 has impacted export competitiveness and price levels in key categories such as skimmed milk powder (SMP) and sweet whey powder (SWP).
For European SMP, the exchange rate adjustment has lifted prices modestly, with offers below €2300/mt quickly disappearing from the market. While global demand remains subdued, this development has opened a window of opportunity for European exporters. The SMP price uptick, driven by currency fluctuation rather than a demand surge, has introduced cautious optimism for the remainder of the quarter.
Similarly, the SWP feed market in Europe has responded to the weakening euro by becoming more attractive on the global stage. This has led to immediate price adjustments by manufacturers and traders, despite limited trade activity during the summer holiday period.
These currency-driven pricing shifts are occurring in an environment where overall dairy demand and supply fundamentals remain relatively stable. As buyers prepare for Q4 volumes, and with US production patterns and Oceanian supply outlooks coming into play, the impact of the exchange rate will continue to be a key variable in market behavior.
To understand the full implications of these developments, including regional outlooks read the full market analysis: https://app.vespertool.com/market-analysis/2143.
