Prices of dairy products have continued to rise due to unfavourable weather in 2019, and are predicted to continue rising next year.
According to a report from Rabobank, prices of whole milk powder (WMP) have increased by 17 per cent compared to that of early 2019 and are predicted to continue rising.
The report said that the hard weather in New Zealand has not improved much in recent months which is still affecting milk output.
“Prices of WMP has rose by nearly 10 per cent since July,” the report said. “Purchase contracts signed for December 2019 until April 2020 have seen prices rise to USD3,250 a tonne from USD2,700 a tonne of early 2019.
The rising prices of imported WMP have resulted in the sharp raising in product prices of many milk companies in Vietnam. Vietnam Dairy Products Joint Stock Company (Vinamilk). At the end of August, Vinamilk raised prices of 21 products by 5 per cent.
And the rise may continue in 2020 as Rabobank forecasted that WMP prices will increase until April 2020.
The rising import prices have also affected revenues and profits of local milk companies. Vinamilk, which is leading the local market with post-tax profit of VND 8.380 billion (USD364m) in the first nine months of 2019, may see falling profits in the fourth quarter and in 2020.