Global yoghurt No 1 Danone predicts dairy price recovery

A dairy price recovery in the second half of the year is predicted by Danone, the world’s largest yoghurt maker.

The company’s price outlook reflects expectations of a return to buying by Chinese importers, whose reduced purchases since early in 2014 have been a major cause of world dairy product prices slumping.

“The recent evolution of supply and demand is still showing that there would be a rebound between the third-fourth quarters and the beginning of next year,” said Danone finance director Cecile Cabanis.

Chinese dairy imports in February were down 36% year-on-year.

“We expect that the Chinese imports will start again, and they will create more pressure on demand, hence have an impact on prices,” Ms Cabanis said. She said that Danone had already detected signs of a rebuild in infant milk formula inventories.

For the EU and the US, Danone forecasts “lower prices in the first half [of 2015], with a rebound likely in the second half of the year”.

In the US, signs of a stabilisation in domestic prices have already emerged.

In emerging markets, Danone forecasts “gradual price increases all year long”.

The predictions come after global skim milk powder prices recently fell to their lowest level since September 2009.