Inside Milk
Butter narrowly squeezes Global Dairy Trade into negative territory
The Global Dairy Trade (GDT) of Tuesday 20 April did not provide any direction to the dairy market. Price corrections for butter and concentrated butter (AMF) offset a slight price increase in whole milk powder. As a result, the course of the global dairy market remains unstable for the time being.
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The GDT closed at an average price of US$4.110 per tonne, leaving the price index 0,1% lower than the previous auction day of April 6. Given the positive sentiment of whole milk powder - by far the most important product of the New Zealand internet auction with two-thirds of the volume - a small plus was actually expected to end the auction day. Instead, after the small plus of 0,3% 2 weeks ago, the GDT now had to record a small minus. This means that the dairy market remains stable.
Small price shifts
There are minor price shifts within the range. Whole milk powder rose as expected by 0,4% to an average of $4.097 per tonne. Fonterra had kept the volume of whole milk powder exactly the same as the previous auction day at 16.500 tonnes. The volume of skimmed milk powder also remained the same, which surprisingly enough, at $3.365 per ton, also yielded the same price as the previous auction day. Okay, exactly $2 per ton lower than last time, but that doesn't deserve a name.
While milk powders and cheddar, with a plus of 1,2% to $4.436 per tonne, helped the GDT increase, butter and butter concentrate were under pressure. The higher supply of butter did not help either. This increased by more than a quarter compared to the previous auction day to 1.235 tons. The average price of butter was therefore 0,6% lower at $5.736 per tonne. However, butter concentrate (AMF), a larger product on the GDT in terms of volume with just under 1.700 tons, recorded a price drop of 3,3% to $6.003 per ton.
No clear direction
Although the very limited supply of lactose also fell in price by 3,4% to $1.260 per tonne, butter and AMF caused the GDT price index to drop slightly. However, the picture of the GDT is consistent with the dairy market of recent weeks, which has not taken a clear direction. In Northwestern Europe, for example, the DCA quotations for butter and milk powder, among others, have also fluctuated up and down in recent weeks.
The relaxation of the corona measures in the various sales markets has been mentioned for some time as possible triggers to give the dairy market a boost. For the time being, these major relaxations of the lockdowns have not been implemented, which means that the situation seems to be still being ignored.