‘For the market to absorb the extra volume available and to pay a higher price for it is an outstanding result and a complete turnaround from a fortnight ago.’ – Susan Kilsby, AgriHQ
Dairy product prices rose unexpectedly at the latest Global Dairy Trade auction, official data showed. The GDT Price Index advanced 1.7%, following a 6.3% fall at the prior auction and surpassing analysts’ expectations for a 6% drop. The rise was mainly driven by a 2.9% price rise in whole milk powder. Overall, whole milk powder was sold at an average price of $2,855 per tonne, despite a 9.7% increase in supply. The price of skim milk powder dropped 10.1%, while prices for butter posted a 4.9% rise. The price of anhydrous milk advanced 3.0%, whereas prices for rennet casein climbed 3.6%. Prices for cheddar and lactose fell 1.0% and 2.7%, accordingly. Yesterday’s auction followed two consecutive declines in the GDT Price Index with a 3.2% fall posted at the end of February and a 6.3% decline registered two weeks ago. Dairy product manufacturers reported that demand for skim milk powder remained low, pointing to growing inventories in Europe and other parts of the world. Analysts state that prices for dairy products are mainly driven by market sentiment rather than some fundamentals. Therefore, Tuesday’s auction marked ‘a real turnaround in attitude’. After the release, the New Zealand Dollar hit its two-week high of 0.7087 against its US counterpart.
