May: PKE Market Update

May 3, 2016

New Zealand:

While the NZ PKE price does not correlate 100% to global markets for alternate proteins and milk prices, there is some relationship all be it ambiguous. So when combined with a myriad of global macroeconomic factors and general lack of market liquidity, PKE is actually one of the most volatile markets in % terms.

Despite the NZ season coming to an end and winter being a historically slow period for demand prices are actually firming. This does not seem overly logical, but the reality is with the likely decline in NZ PKE imports then NZ demand will have less influence over pricing in the near term.


Origin PKE markets have rallied approximately $30 USD since the beginning of April. The key drivers are mostly on the supply side. El Nino weather conditions (drought) impacted on production over and above initial forecasts.


European farmers have a host of products that are substitutable for PKE. However, many of these are appreciating in price. This appreciation seems to be linked to two factors, South American soy crop concerns and the general wider commodity rally. European demand looks to be in line with previous years.

Other commodities:

The most interesting dynamic in April was the $75 USD ST rally in Soymeal Futures (Fig 1.0). This equates to approximately $120 NZD/mt. This rally is being driven by anticipated reduction in South American soy production which has tightened the global S&D complex.

Fig 1.0: CME Soybean Meal Futures


Wide spread rain across New South Wales and a promising forecast for the East Coast of Australia for the month of May should ensure 100% of intended winter crop hectares will be planted.

A big shout out to the ladies attending the DWN Conference this week. This a great opportunity for women throughout the industry to talk, listen, learn and network on issues that impact the industry.

You can now follow us on twitter @ADMNewZealand

Questions or pricing? Please call Kevin, Sid or Ross.



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