Gap between EU and Oceania wholesale markets narrows

Published 19 February 19

Over the last couple of months, the gap between EU and Oceania wholesale butter markets has narrowed. In January 2019, the EU wholesale butter price had an US$838/tonne premium over Oceania prices, the smallest gap between the two price series since March 2018.

During 2018, EU and Oceania wholesale butter markets diverged from one another, as uncertainty over the extreme weather experienced during 2018 supported EU wholesale butter prices. While Oceania prices also firmed, they did not firm to the same extent as the EU markets. As such, the two markets moved further apart as 2018 progressed, reaching a maximum difference of US$2,050 in September 2018, the largest gap in over a decade.

Price difference between EU and Oceania wholesale butter prices

Despite the gap between the two price series reducing in recent months, it has not removed the EU premium altogether. As such, there continues to be a lack of interest of EU butter on export markets, as prices are unable to compete with the Oceanian product. At AHDB, we will continue to monitor developments on both EU and World wholesale markets.