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Friday, December 15, 2017
 Solid Demand At April 4th Auction Sees Modest Price Rise  

Chinese and southeast Asian demand has remained solid, and coupled with a wide range of buyers, the latest GlobalDairyTrade auction has seen a modest rise in prices.

 

The price for New Zealand’s main export, whole milk powder (WMP), went up by 2.4 percent to $2,924 per metric ton at the April 4th auction.

 

The result reinforces a forecast from the Ministry of Primary Industries that the value of dairy exports will rise to $14.5b for the year to June, up from $13.2b in 2016.  

 

Overall, dairy prices lifted 1.6 percent to an average $3,005 per metric ton. Skim milk powder (SMP) dropped 0.8 percent.

 

A slight rise in prices at the last auction on March 21 came on the heels of two consecutive drops.

Westpac analyst Sarah Drought said the auction result was an encouraging sign that prices were stabilizing.

 

“We had been concerned there might have been a fall but demand from China and south-east Asia has remained solid. Growth in China is the key,” she said. “Dairy markets had more resilience than we gave them credit for, as buyers stepped in to take advantage of lower prices.”

 

The United States Dairy Council said in its latest update that the combination of light inventories and financially pressured farmers in China should see greater imports in to the country to bolster domestic supply.

 

It warned, though, that China typically bought 40 percent of its WMP needs for the year in the first quarter of the financial year.

 

Milkfat products delivered mixed results with butter prices falling while anhydrous milkfat (AMF) prices lifted. AMF is now slightly more expensive than butter when priced on a milkfat content basis. The auction also delivered a poor result for cheese with the cheddar price index down 4.4 percent. This product is also under pressure with strong competition from European suppliers.

 

The 157 participating bidders bid for a total of 22,642 metric ton of product.


Posted on Friday, April 07, 2017 (Archive on Friday, April 14, 2017)
Posted by bholcomb@adpi.org  Contributed by bholcomb@adpi.org
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