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Global Dairy Trade Price Jump

Monday, 22 July 2019 at 3:25pm

A 2.7% jump in last week’s Global Dairy Trade overall price index – with a 3.6% bounce in whole milk powder – was a  pleasant surprise.

Whole milk powder (WMP) average price nudged over the $US3000/t mark. Skim milk powder (SMP) prices also saw a 3.8% rise, lifting the average price to $US2505/t. 

This is pleasing results for this time of year, held up by robust Southeast Asia demand. 

But, according to Rabobank, it seems clear there is stock building in China.

“Based on the prolific Chinese import volumes in 2019 to date, we anticipate some price weakness to eventuate over the coming months as inventory pipelines recalibrate over the short term.”

This was the first lift in WMP prices since March. Smaller improvements occurred in fats prices. 

While last week’s GDT was a little stronger than they had pencilled in, Westpac is holding its $6.90/kgMS forecast for the current season. 

WMP prices still remain about 7% lower than their 2019 highs, with the six auctions during April, May and June all posting falls. SMP prices led price gains last week and milk fat prices stabilised after recent large falls, with butter and anhydrous milk fat prices increasing 1.7% overnight. 

ASB is holding its forecast at $7/kgMS, but so early in the season that it comes with a wide range of error of $1/kgMS each way.