Another lift in global dairy commodity prices

Global dairy commodity prices have continued to rise, posting a slight lift in the latest Global Dairy Trade (GDT) event.

Prices were up 0.9 percent to an average price of US$3,271/t at the February 19 GDT auction, with increased volumes behind the relatively small lift. 

The index has continued to increase since the December 5 GDT event in 2018. 

Prices increased for all commodities except lactose (-2.9 percent) and WMP (-0.2 percent).

However NZX Dairy Derivatives analyst Robert Gibson said the results were slightly down on what was expected.

"Overall, while the direction of change was in line with the NZX Dairy Derivatives market expectations leading into the event, the final results were not as bullish as expected," he said.

Another lift in global dairy commodity prices
Photo credit: Global Dairy Trade Auction

Whole milk powder (WMP) prices at the February 19 GDT event decreased 0.2 percent to US$3,022/t, down from US$3,027/t at the previous event.

"Leading into this event offer volumes for WMP were up 15 percent on the previous event, and up 48 percent on the previous year. The increase in volumes available is likely to have moderated the any further lift in WMP prices," said Mr Gibson.

Skim milk powder (SMP) prices at February 19 GDT lifted 2.8 percent on the previous event to US$2,580/t SMP offer volumes leading into this event were up on the previous event (+9.9 percent), and up on the previous year (+46 percent). 

"Despite a lift in volumes, prices continued to increase which indicates strong demand side pressure for SMP. Since the December 4 GDT event, when SMP prices started their rally, average GDT prices for SMP have lifted from US$1970/t to US$2580/t (+US$610/t)."

Anhydrous milkfat (AMF) and butter prices increased 0.7 percent and 1.2 percent respectively. 

Ahead of the event, the NZX Dairy Derivatives market had expected milkfats to be similar to, or up on the previous event. Reduced offer volumes leading into this event for both AMF (-3.4 percent) and butter (‑18 percent) may have helped to support prices, with more sales of AMF likely to have moderated any further increase in prices.

Rennet casein prices at February 19 GDT lifted 2.7 percent on the previous event to US$5,740/t. SMP offer volumes leading into this event were up on the previous event (+9.9 percent), and up on the previous year (+46 percent). Despite a lift in volumes, prices continued to increase which indicates strong demand side pressure for SMP. Since the December 4 GDT event, when SMP prices started their rally, average GDT prices for SMP have lifted from US$1970/t to US$2580/t (+US$610/t).

"Lactose prices decreased to US$998, down 2.9 percent on the previous event but only represents small volumes compared to other dairy commodities, indicating that we may have seen a slight lift in volumes sold at the event."

Newshub.

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