Market Takes The Scenic Route
ANZ agri economist Matt Dilly looks at the impressive run of global dairy prices this year.
The GDT price index eased 1.4% to an average price of US$4,029/t. Whole milk powder prices dropped 2.1% to US$3804/t and skim milk powder eased 2.2% to US$2682/t.
NZX dairy analyst Rosalind Crickett says the index movement was weighed down by decreases seen to the milk powder products, despite lifts to butter and cheese products – with results spot on with their pre-event expectations.
“In what normally is a quieter start to the year, 87% of product on offer was still sold, but saw weaker demand from both North Asia and the Southeast Asia/Oceania regions.”
Crickett says that despite there being -15.7% less WMP and -15% less SMP on offer since the last event, traders have been describing a “hand to mouth” purchasing pattern by regions over the holiday period.
She notes that recent Chinese inventory data showed a 25% year-on-year (YoY) increase in November WMP imports, as the country restocked with continuing weak domestic milk production a key factor. The recent buying activity by North Asia has also seen month-on-month (MoM) ending stocks for SMP up 33%.
Despite an increase in NZ milk fat product availability on the GDT platform due to the Cream Group Flex, there were mixed
results across anhydrous milk fat (AMF) and butter. With US and EU also reporting ample cream supplies there was seemingly little effect on the 2.6% lift in butter prices.
Interestingly both cheese products have rebounded in price after three consecutive declines, with traders expecting price support with cheese volumes tapering off in the latter part of the season, she says.
