Inside Milk
Biggest increase in Global Dairy Trade in 7 months
The Global Dairy Trade recorded the largest average price increase in 7 months today (Tuesday 7 September). Prices of all dairy products, from milk powders, butter and cheddar, rose on the New Zealand internet auction. It illustrates the upward movement in the global dairy market.
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The so-called Price Index of the Global Dairy Trade (GDT) rose by 4% on the 291st auction day in the existence of the internet auction. This is the highest increase since March 2 this year, when the GDT - in retrospect somewhat overextended - rose by 15%. In the 11 auction days after this auction day, the GDT Price Index fell slightly (0,1%) to average (3,8%) or rose slightly by 0,3%. The plus of 4% is now a clear step up.
In addition, provider Fonterra, which continues to see exports to China continue smoothly, had increased the offer at the auction by almost 8%. The outlier was skimmed milk powder, the volume of which increased by 20%. That is not completely strange, because normally the volume offered on the GDT increases significantly. But not this year. The supply this year is more than a third, around 11.000 tons, lower than last year. A quick look shows that we have to go back to 2009 to find an offer in the first half of September that is lower than now.
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From that perspective and the predominantly improving dairy market worldwide, it is understandable that prices on the GDT are rising. For example, despite the significantly higher supply, the value of skimmed milk powder increased by 7,3% to US $3.274 per tonne. Whole milk powder, the main product with more than 55% of the volume, increased by 3,3% to €3.691 per tonne. Buttermilk powder (BMP) is also increasing with minimal supply, by 3% to $3.287 per tonne.
The fat segment is also participating well in the upward movement of the GDT. Butter rose 3,7% in value to $3.274 per tonne, while butter concentrate (AMF) rose 3,1% to $5.970 per tonne. The limited supply of lactose (+6,4% to $1.167 per tonne) and cheddar (+3,6% to $3.691 per tonne) also increased in value. It now remains to be seen whether the positive flow of the GDT will also continue in the quotations in Northwestern Europe this week. The DCA quotations have been on average for several weeks is making strong progress, especially for cream, raw milk and foil cheese.
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