Global Dairy Trade takes a hard knock down

The average price index on auction day 306 of the GDT fell by 3,6% on Tuesday. This was one of the relatively sharp declines in the average price on the GDT in nine months. A decline in prices at the dairy auction was already expected. The supply at the auction was slightly higher for the first time since January 18. Especially whole milk powder (+7%), butter, butter concentrate (AMF) and cheddar (all three about a third higher) were offered more. Dairy group Fonterra, main supplier at the auction, indicated before the auction that it would respond to developments on the demand side of the dairy market in the short term. As a result, stocks are increasing again. 
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The war between Russia and Ukraine plays a role, as do the lockdowns in China due to the corona and the economic crisis in Sri Lanka. For Fonterra, the world's largest dairy exporter, these developments have an effect on the export potential of the powders and fat products. Because these movements are concentrated in Southeast Asia, they appear to have a limited effect on trends in the European dairy market for the time being. The DCA dairy quotations will be announced again next Thursday, which will make it clear what the trend is in Northwestern Europe. Fonterra continues to describe the long-term outlook for the global dairy market as positive.

The milk powders (photo) lost the most value on today's auction day. The average price of whole milk powder, responsible for more than 55% of the supply, fell by 4,4% to US$4.207 per tonne. Skimmed milk powder fell 4,2% to $4.408 per tonne. Butter products also recorded red figures. Butter fell 3,7% in price to $6.640, while AMF fell about 1,3% to $6.802 per tonne. Cheddar also lost ground, falling -3,9 to $6.185 per tonne. The minimum lactose offered joined the downward trend with a decline of 2,4% to $1.565 per tonne.