Global dairy prices flat, milk powder surges at fortnightly auction
Global dairy prices were largely flat at an auction early on Wednesday, but key product whole milk powder posted surprisingly strong gains on increased demand from Asia.
The GDT Price Index edged down 0.2%, with an average selling price of $3,255 per tonne, having fallen 2.6% at the previous sale two weeks earlier.
Prices for whole milk powder, the most widely traded item, climbed 2.1%, beating futures markets expectations of a 2% fall.
“Prices largely (lifted) for delivery dates from October to January with improved demand from North Asia,” said Robert Gibson, dairy analyst at NZX, referring to whole milk powder.
Demand from China and the looming risks from a U.S.-China trade war would likely be the biggest factors determining the trajectory for prices throughout the rest of the year, despite lower New Zealand supply likely providing support.
“If demand for dairy in China falls sharply, even limited growth in supply wouldn’t be enough to stop prices tumbling,” Anne Boniface, senior economist at Westpac Bank, said in a research note.
A total of 34,410 tonnes was sold on Wednesday, falling 1.6 percent from the previous auction, the auction platform said on its website.
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