Slight nudge upwards in Global Dairy Trade, but SMP nose dives
Today's Global Dairy Trade (GDT) showed a slight improvement with the overall trade price index up 1.7pc.
However, it comes after a dramatic drop two weeks ago, where skim milk power and whole milk powder prices took a heavy blow.
Today, there was another significant drop in the skim milk powder price index, which were down 10pc, after being down 15.5pc two weeks ago. Whole milk powder prices were up 2.9pc, after being down 12.4pc in the last auction.
The previous drop had been predicted in advance by commentators and today's, the third drop in a row, had also been predicted by some, as supply outstripped demand.
A drop of 3pc was predicted for whole milk powder prices, while a 6pc drop in skim milk powder and milkfat products was also predicted.
Fonterra, which runs the GDT, offered around 25,000t more product into the auction this week, in light of increased supply volumes from dairy farmers in New Zealand.
Earlier this month, IFA National Dairy Chairman Sean O’Leary said the GDT only traded 636,000t of product during 2016 - down 36pc on the peak levels of trade of 2014, and consisting mostly of WMP and SMP (73pc, or 464,000t).
He also said that this is only a fraction of global exchanges in powder: less than 12pc of the total quantities of milk powders traded globally during 2016, and just under half the 950,000 metric tonnes of SMP and WMP combined traded by the EU in that year.