Global Dairy Trade falls sharply for the third time

The declining dairy exports to China and the weak dairy market due to economic headwinds are the main causes of the rapid decline in dairy prices on the GDT. In just under six weeks, prices at the global dairy auction have fallen by 14,5%. On July 5, dairy products were depreciated by an average of 4,5%, followed by a decline of 5% on July 19 and now also 5% today. The GDT Price Index is now at the lowest level since the end of February 1.163 at 2021 points. 

The volumes sold are gradually increasing again, which is also logical given the increasing milk supply. 27.500 tons of product were sold at this auction.

'Large' products are reduced more rapidly
While the index fell again by 5%, the prices of major products, namely whole milk powder, skimmed milk powder and butter, fell even faster. Skimmed milk powder fell by an average of 5,3%, whole powder and butter both lost 6,1%.

The further decline in butter prices opens up additional prospects for exports to Europe, although the butter price there is also under pressure.

Price difference between NZ and EU butter almost €2.000 per tonne
However, prices 'down-under' are falling faster, making it increasingly interesting for traders to take a chance. There is a gap of almost €2.000 per tonne.

Among whole milk powders, the instant and UHT powders continue to maintain a price difference of an average of around $100 per tonne compared to the medium heat powders.

Lean EU powder sold cheaply
With regard to skimmed milk powder, it is striking that the European product is sold here for the equivalent of more than €3.400/€3.430 per tonne, which is well below the current Western European price for skimmed milk powder.