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Explained the monsoon situation and its possible impact on SMP and milk prices. SMP prices are expected to come down due to pre monsoon rains.

Procurement recommendation.

• Advised the client to book for July requirements in mid June from Maharashtra/Southern India as there are expectations of early flush in South.

procurement recommendation.

• Advised the client to book for June and July requirements in May and June from Southern India as there are expectations of early flush in South.

Current SMP fundamentals-

• As per the expectations, prices have declined by INR 5-10 per kg from December.
• Milk arrivals have improved due to ongoing flush season in India.
• Low marriage demand as well as mid day meal demand is also putting pressure on prices.
• Export Subsidy has been extended till JFM’22.

Current procurement recommendation.

• It is the good time for procurement as prices are under pressure due to low demand. However for medium term, we should wait for 1-2 weeks for better prices.

Current SMP fundamentals-

• As per the expectations, prices have declined by INR 10-15 per kg.
• Milk arrivals have improved due to ongoing flush season in India.
• Low marriage demand is also putting pressure on prices.

Current procurement recommendation.

• 15th December-30th December is the good time for procurement as prices are under pressure due to low demand .It is better to book SMP for 1-2 months of requirement CMP(current market price).

Current SMP fundamentals-

• In North,Farm gate Raw milk prices improved by INR 2 per litre to INR 43-44 per litre for 6.5 fat milk due to low milk arrivals. Typically, after Diwali milk arrivals improve but this year, milk arrivals are not improving which is why companies are giving higher prices to farmers.
• SMP prices improved by INR 5 per kg in North region in this week. In South, KMF raise their prices by INR 20 per kg to INR 220 per kg.In west, SMP prices are ruling between INR 210-220 per kg.
• Amul is quoting INR 225 per kg for 1 year old stocks and for fresh stocks they are quoting INR 270 per kg.
• Prices are expected to cool down in December when production of new SMP will take place. In December, we may see decline in SMP prices by INR 10 per kg.

Current procurement recommendation.

• In November, prices might increase by another INR 10 per kg.It is better to book SMP for December 2021 at CMP(current market price) i.e around INR 210-220 per kg for cow/mix SMP and INR 250-260 per kg for Buffalo SMP. We will book for January in December month when there will be some softness in prices.

• Had a Detailed discussion with Vishwas Ji of Nuflower on SMP Fundamentals and Outlook . Also had a pricing strategy discussion on SMP procurement:
• As per our discussion, currently SMP demand is good in Maharashtra because of festive demand and there is no pressure of milk arrivals. Companies across India are trying to dispose off older stocks and prepare for upcoming flush season.
• Milk arrivals are expected to improve by end of September in Northern and Western region.
• National SMP Stocks are at around 217 KTs which is on a moderately higher side which will try put pressure on prices. But  upcoming festive demand in October and marriage demand from November to February will try to support the prices and keep the prices on a stable note with an upward bias.Also, raw milk prices are ruling INR 25-26 per litre, higher by 1-2 per litre from the last month which will increase  the production cost of SMP.
• SMP prices are expected to stay in stable zone with an upward bias of INR 10-15 per kg. Prices are expected to move between INR 210-230 per kg in Maharashtra and Karnataka in the coming 1-2 months.
• In North, prices are expected to move between INR 250-270 per kg in the coming 1-2 months.

Thanks

Shubhank

Had a Detailed discussion with Vishwas Ji of Nuflower on SMP Fundamentals and Outlook . Also had a pricing strategy discussion on SMP procurement:

1. SMP Outlook in the coming month is looking stable to positive. Festive demand in September and October can support SMP prices. Also, lean milk arrivals in North India is supporting the prices amid low trade of SMP
2. Monsoon is delayed which has impacted the calving cycle in Northern region. SMP prices in South and Western region has stabilised around INR 200-220 levels from the last 2 months.
3. Recommended them to procure for September and October requirement at INR 200 per kg.

Thanks

Shubhank

Had a Detailed discussion with Vishwas Ji of Nuflower on SMP Fundamentals and Outlook . Also had a pricing strategy discussion on SMP procurement:

1. SMP Outlook in the coming 1-2 months is looking stable to positive as Gujarat government has announced export subsidy of INR 50 per kg on SMP which will lead to increase in demand in the coming months.
2. Monsoon is delayed which has impacted the calving cycle in Northern region. Milk arrivals are lower in Northern region which has not SMP prices to fall further towards INR 170-180 levels during this on-going period of demand destruction caused by Covid 19 second wave. SMP prices in South and Western region has stabilised around INR 200-210 levels from the last 2 months.
3. Currently, demand of SMP is less as traders are not stocking up SMP due to fears of covid third wave. It is right time to book SMP as prices are stabilized and subdued and there is high probability that prices may remain on a higher side in the coming 1-2 months.
   We recommend you to book SMP at INR 195 to 200 per kg for August and September requirement.

Thanks

Shubhank

Had a Detailed discussion with Vishwas Ji of Nuflower on SMP Fundamentals and Outlook in last two weeks. Also had a pricing strategy discussion on SMP procurement:

Call with Nu Flower:
1. The have stock up to 20th June
2. They need to purchase 100 MT till July requirement
3. Advised to buy in staggered manner of 20 MT lot in coming weeks  at available price keeping present fundamental factors in view.
4. Long term buying advise will be passed during August.  

Thanks

Pradeep & Shubhank

Had a Detailed discussion with Vishwas Ji of Nuflower on SMP Fundamentals and Outlook in last two weeks. Also had a pricing strategy discussion on SMP procurement:

As per our discussion on SMP fundamentals and Pricing strategy, details are below:

• Discussed about the current happening across Maharashtra, North and South Regions.
• Discussed about the various factors like raw milk prices, marriage demand in the coming weeks which can affect the prices negatively.
• Discussed about various suppliers prices and shared the same.
• Currently, Maharashtra Prices are ruling at INR 220 per kg, we are expecting some bearishness in the coming weeks so i advised vishwas ji to wait till 15th May end for procurement of one month.

Thanks

Shubhank