Glanbia is forecasting slow growth in milk supply around the world this year, with uncertainty dominating the demand side of the market.

"It is estimated that global milk production for the top milk-producing regions in 2019 will increase modestly by 1%," the processor has said in a new market outlook, days after cutting its February milk price. The company forecasts 1% production growth in the EU and slightly more in the US, steady supply in New Zealand and a decline in Australia as a result of bad weather.

Continued uncertainty related to Brexit has seen UK warehouses full of stock

European markets are suspended to the outcome of Brexit. "EU curd and UK cheddar markets are firm but continued uncertainty related to Brexit has seen UK warehouses full of stock to avoid any post-Brexit risks," Glanbia warned. "EU butter demand is quiet in anticipation of Brexit outcome, spring flush and consumer sentiment," the company added.

Butter for Japan

There is good news from Japan, which has opened a quota of 7,000t of butter imports. Skimmed milk powder, too, should see price recovery after the end of EU intervention sales, according to Glanbia.

However, global economic growth forecasts have been revised down, especially because of the Chinese slowdown caused by the trade war between the country and the US.

"While GDP growth has slowed, lack of domestic production and low stocks mean import demand from China is expected to continue to grow in 2019," Glanbia expects.

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