Milk powders on GDT are rising surprisingly fast

The price of skimmed milk powder rises by as much as 8,4% to $2,889 per tonne. Whole milk powder takes a step up, gaining 3,2% to $2,985. Cheddar is also joining the price rally, trading at $3,674, up 7,2%. Butter (-1,4% to $3,282) and lactose (-2,7% to $1,277) failed to follow the rebound. Nevertheless, the average price rises by 3,6% to just above the $3.000 per tonne mark. The traded volume of 33.700 tons was slightly lower than the previous auction at the beginning of this month.

The revival in milk powders and cheddar is quite unexpected and can be seen as a strong signal. Especially because milk production in New Zealand is working towards the seasonal peak in October, with supplies being more abundant at the start of the season. In the past 2 months, the auction, organized by Fonterra, has always ended in negative terms overall.

Will the European market respond? 
The GDT quotations are not yet at the level before the corona crisis, but when it comes to skimmed milk powder the difference is no longer that big. However, in view of corona waves in the world, care must be taken against too much euphoria. Moreover, the GDT tender system sometimes has a tendency to exaggerate. 

The question is whether the European market will respond to the higher GDT. In recent weeks, milk powder and cheese prices have slowly increased in our country, and the positive developments in New Zealand may fuel the rising trend. This is not a certainty. At the beginning of July, the GDT also showed an excess, but the European market reacted little or not at all.