Rabobank flags rising global dairy prices, warns of downside risks ahead
While global dairy commodity prices continue to climb in most key exporting countries, the second half of the year is expected to bring increased downside risks.
She says this was because for the second time in one month, Fonterra dropped the amount of dairy product available at coming GDT Events.
WMP volumes were scaled back by a significant 20,000 tonnes (spread across GDT auctions over the coming months). SMP was also pared back by 6,000 tonnes, while AMF offerings were lowered by 750 tonnes for GDT events over upcoming auctions.
Higgins says these changes now mean that the next few GDT Events will have the lowest volumes of WMP available for this time of the year since 2016 - at a time when historically both product on the GDT and in the milking sheds are ramping up.
Chinese buyers were still very much present at this GDT auction - but evidently wanting to pay lower prices, she notes.
"While this was the lowest absolute volume of product Chinese buyers have procured for this time of the year since 2017," Higgins says. "They still purchased two-thirds of the WMP available. SEA/Oceania buyers took home around one quarter of available WMP."
