Wednesday, 02 May 2018 09:06

GDT price index down 1.1%

Written by 
Emma Higgins. Emma Higgins.

The second to last Global Dairy Trade (GDT) event for the 2017-18 production season saw the auction’s price index down 1.1%.

Whole milk powder price index was down 1.5% to US$3231/metric tonne.

Rabobank’s dairy analyst Emma Higgins says the drop in WMP price coincides with Fonterra revising upwards their production forecast for the full season to -2% (from -3% previously) to 1.5billion kgMS.

“Weather has improved for most parts around the country and in fact total New Zealand production for the season to date (March 2018) is only trailing marginally behind last season at just -0.3%.  

“More generally, New Zealand product pricing tends to wane over the coming weeks as we move into our seasonal production hiatus and sentiment trails off as the focus shifts to the Northern Hemisphere.”

However, there still remains demand for fresh SMP and a late spring in the Northern Hemisphere delaying production has resulted in tighter fresh inventories. 

“As such, we saw positive price support for SMP this morning, with a lift of 3.6% bringing the average SMP price just shy of the US$2000 mark.  

“New Zealand product is still priced at a premium over European sourced SMP.  And while demand for fresh is strong, old EU SMP stocks are seeing some clearing movement.” 

Results

AMF index down 1.9%, average price US$6,032/MT
Butter index unchanged, average price US$5,647/MT
BMP index up 0.5%, average price US$1,990/MT
Ched index up 3.1%, average price US$4,024/MT
LAC index up 0.6%, average price US$616/MT
RenCas index down 10.5%, average price US$5,177/MT
SMP index up 3.6%, average price US$1,999/MT
WMP index down 1.5%, average price US$3,231/MT 

 

 

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GDT price jump surprises economists

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

Forecasts steady as demand holds

Banks are mainly holding firm on their forecasts of $7/kgMS despite last week’s flat Global Dairy Trade result – a small decline of 0.4% in the overall price index.

$7 payout still on the cards

Economists are still sticking to a 2019/20 season forecast of around $7/kgMS despite the 3.8% drop in the Global Dairy Trade overall price index last week.

 
 

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