Bill English has just returned and discovered that the Chinese are sitting on a massive stockpile of milk products. From China:
The Finance Minister, fresh from a week long trip to China, New Zealand’s largest export market, said that there was a picture of an international glut of dairy products which would keep prices lower for some months to come.
In recent weeks the US Department of Agriculture had highlighted an increase in stocks of dairy prices being stored in China.
“It appears there’s been almost literally a mountain of milk powder in warehouses around China, more than people thought so it might take a bit longer to work through,” English said.
“The way it’s been described to me, there’s been a perfect storm of excess milk supply, influenced by events in Russia, Europe, in China, in New Zealand, Australia and that’s led to these prices which I think everyone regards, everyone believes are too low for the health of the dairy industry, whether it’s here, in China or in Europe, but it is going to take some time for the prices to pick up.”
English remained confident that there would be a recovery in dairy prices some time in 2015.
“I don’t think there’s much doubt that they’re going to pick up, it’s just a matter of when and how fast.”
Estimates ranged from picking up in a few months to remaining flat until Christmas, English said.
“I haven’t seen any estimate that it would take years to clear up.”
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