Global butter market expected to decline

The global butter market is experiencing a significant decline as prices fell in all major regions, with European butter demand leading the decline due to oversupply, according to a report from commodity platform Vesper.

The August 28 report said a supply surplus of 56,500 tonnes compared to the first half of 2024 has pushed European butter prices down to €6,700 ($7,793) per tonne, according to the Vesper price index.

However, real-time market activity showed further price declines, with fourth-quarter offers falling from €6,600 ($7,739) to €6,250 ($7,329) in 24 hours, Vesper wrote.

The price of Oceania butter was stable at €6,190 ($7,200)/t, while the price of US butter was €4,246 ($4,938)/t, according to the Vesper Price Index.

The report said the market dynamics had changed in favour of buyers as trading activity picked up after the holidays.

According to the report, the European supply surplus was due to three key factors:

37,500 t due to increased production

6,500 t due to decreased exports

12,500 t due to increased imports

According to the report, US butter prices are falling rapidly as creameries maintain high activity levels, producing more butter than the domestic market consumes.

However, record US butter exports, driven by competitive prices compared to global markets, helped stabilise stock levels despite the production increase.

“Oceanic butter prices have been relatively resilient in recent weeks but have started to ease as rising milk prices and lower European prices weigh on global indices,” Vesper wrote.

“The current situation, with sellers facing pressure to sell off stocks and buyers not feeling the urgency to buy, makes it difficult for prices to recover in the short term.”

Tags: prices, butter