Average gross price of milk in Brazil at 1.1011 reais/liter in November, down 1.5% from October amid weakened demand, CEPEA says

Nevin Barich

PIRACICABA, Brazil , December 18, 2013 (press release) – Milk purchases have increased in almost all states in Brazil; moreover, the demand has weakened. Therefore, the average price paid to producers dropped for the first time this year. Cepea data indicate that milk quotes have moved down in almost all states surveyed, except in Bahia and Santa Catarina.

The average gross price in Brazil (including freight and taxes) closed at 1.1011 real per liter in November, for a decrease of 1.5% (1.67 cents of Real) compared to October. As for the net price (neither freight nor taxes are included), the average was 1.0196 real per liter in November, downing 1.87% in relation to the previous. These averages are calculated by Cepea and are weighted by the volume purchased in October in Goiás, Minas Gerais, Paraná, Rio Grande do Sul, Santa Catarina, São Paulo and Bahia.

The milk purchases increase in almost all states surveyed by Cepea was attributed to the pastures recovery, due to rains. From September to October, the Index for Milk Purchases (ICAP-Leite Cepea) soared 3.93%. Except for Rio Grande do Sul and Paraná, other Brazilian states registered increases of milk purchases in October.

Most players from dairy companies/cooperatives surveyed by Cepea expect new price decreases for milk. Roughly 90% of agents surveyed, which accounts for 94% of the sample, indicates that quotes will drop in December.

In the by-products’ market, the demand decrease, due to high price levels over the last months, affected decreases of dairy products’ quotes. In the wholesale market of São Paulo State, UHT milk and mozzarella cheese prices downed 5.65% and 2.12%, respectively, from October to November, traded at 2.18 reais per liter and 12.81 reais per kilo in the partial of the month (until Nov. 27). This research occurs daily with dairy companies and wholesalers, and is financially supported by OCB (Brazilian Cooperative Organization) and CBCL (Brazilian Confederation of Dairy Cooperatives).

In November, the gross price of milk paid to producers dropped in almost all states surveyed by Cepea, except in Bahia and Santa Catarina, where increases were 1.41% and 0.21%, respectively. (Cepea-Brazil)

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