ADM New Zealand Update
January 12, 2016
ADM New Zealand business has continued to grow in 2015 with an increase of 70% compared to 2014 volumes. We thank our clients for their ongoing support and look forward to continuing and growing the relationship over the coming seasons.
To improve our service when it comes to placing orders, our 0800-123-PKE central phone number is now directed to our head office. Electronic orders can also be emailed to firstname.lastname@example.org.
NZ demand for PKE increased in December both out of store and as clients took forward cover ahead of the forecasted dry summer weather. However recent rainfall and more favourable weather continues to buy time for farmers to make decisions about supplementary feed, though more rain is needed.
The GDT has not started the year on a positive note and most commodity prices remain suppressed. NZ prices range from $220 - $240 but are at risk of high volatility due to lack of liquidity in supply.
NZ again topped 2 MMT of PKE imports in 2015 and may be a record year once final import figures are confirmed.
The bid / offer (demand/supply) spread in the market has blown out to anywhere from $15 - $20. This is due to lack of liquidity on both sides. The origin is undoubtedly in the low season of production and hence feels no pressure to sell. Meanwhile, destination markets’ end users certainly don’t have the willingness to buy at higher prices while the prices for their own products remain subdued. Vessel freight remains low due to low fuel prices.
Winter typically sees more demand for Feedstuffs in Europe as cows move indoors. This year however, is unseasonably warm, hence cows are not eating as much as they spend more time outdoors on pasture.
World balance sheets point to comfortable supply including, record stock of oil, corn, soybeans. While this remains the situation prices are likely to remain subdued. Often the response to low prices is to offset with increased production which has the potential to exacerbate the situation. We will know more on world crop stocks by the start/mid-point of Q2.
For the latest pricing please phone Kevin, Sid or Ross.