Tuesday, 28 May 2019 11:55

No surprise in softer WMP price

Written by  Pam Tipa
Emma Higgins. Emma Higgins.

Softer whole milk powder (WMP) prices are not surprising given China’s strong import activity recently and the steadily increasing WMP pricing, says Rabobank dairy analyst Emma Higgins.

“We have been expecting China’s import growth to seasonally slow, combined with our expectation that inventory pipelines are full,” Higgins told Dairy News. 

She was commenting on the final GDT Event last week for the 2018-19 production season. The GDT price index dropped 1.2% to US$3414/tonne. It ended a good run of 11 positive GDT Events since December 2018, says Higgins.

WMP prices moved lower by just over 2% to US$3180/t.  Skim milk powder saw a small lift of 0.5% to US$2529/t. 

“This was a good result given that more SMP was on offer for this GDT Event by 17% on prior forecasts and the last GDT Event. Oceania SMP prices are leading international prices, with NZ product retaining a premium over both European and US product.” 

Fats dived. AMF results were lower by 1.4% to US$6140/t.  Butter was softer by 3.2%, landing at an average price US$5297/t.  

“Despite this, Oceania butter is still priced ahead of US and EU product. Part of the recalibration of fat prices seen in this GDT Event comes down to the affordability of European product compared to Oceania butter, in particular.

“The other factor is that the northern hemisphere season is well underway, with reports of improved milk flows from earlier in the year….

“We are moving into the quieter months for NZ production and therefore fresh product for the GDT.  Any major price movements over the next GDT Events will be influenced by the urgency of buyers looking to obtain product over NZ’s seasonal hiatus period.”  

She notes EU milk production for March 2019 was higher by 1.1%. This brings total EU milk production for the first quarter 2019 to a small decline of -0.1%  year on year.

BNZ senior economist Doug Steel says the small decline at last week’s event was in line with expectations and “fits with our broader view that prices will drift lower over coming months”.

“Not all prices fell. Cheese bucked the trend with a massive 15.2% gain [from already elevated levels] and casein prices also rose strongly,” he notes.

More like this

Zespri win key battle in China

Zespri has become the first New Zealand company to be granted Key Trademark Protection Status in China, ensuring greater protections against copyright infringements.

Virus infects dairy

Demand for dairy products in China hangs on what further steps the Chinese Government takes to stem the spread of coronavirus.

Coronavirus impact unclear

It’s still unclear just how much the outbreak of coronavirus in China will affect New Zealand exports to that country.

China still needs to eat

Meat Industry Association (MIA) chair John Loughlin says despite the fears about the coronavirus, China still needs to eat. 

Featured

 

Zespri opens new head office

Zespri last week officially opened its Mount Maunganui head office as part of the kiwifruit industry’s marquee Momentum 2020 conference.

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Apocalypse cows

UK farmers are up in arms over claims made in a TV documentary Apocalypse Cow: How Meat Killed the Planet.

Life saving cows

Research on a herd of cows in southwest Scotland could play a part in helping humans live longer and healthier…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter