During the previous auction on the New Zealand Global Dairy Trade exchange, there was a drastic drop in the prices of dairy products, which had not been recorded since last year. The current quotations have not resulted in a continuation of this trend.
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The largest decline in dairy product prices this year
The value of the general price index after the last auction on July 16 this year. increased by 0.4 percent
The largest increases were visible in the case of Cheddar cheese (+ 6.2%) and anhydrous milk fat (+ 4.0%). In turn, the largest decreases concerned skimmed milk powder (- 1.1%) and whole milk powder (- 1.6%).
During the last GDT session, 22,954 tons of dairy products were sold, which was just over 1,000 tons. ton lower compared to the previous auction.
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Purchased milk and milk products are becoming cheaper
Results of the last GDT session
The results of the last GDT session are as follows:
- Anhydrous milk fat – increase by 4%,
- Butter – increase by 0.8%,
- Buttermilk powder – index unavailable
- Cheddar cheese – increase by 6.2%,
- Lactose – decrease by 0.6%,
- Mozzarella – decrease by 0.8%,
- Skimmed milk powder – decrease by 1.1%,
- Whole milk powder – decrease by 1.6%.
The increase in the index is minimal, but it is still good news
Even though the index increase is minimal, it is still good news, considering the fact that since the session held on June 4 this year. So far, only declines in the value of this index have been recorded, as noted by the Association of Polish Milk Processors.
“Compared to the previous stock exchange session on July 2 this year. buyers revised their forecasts for butter prices (average contract price increased by 0.8%, previously down by 10.2%), anhydrous milk fat (average increase by 4%, previously down by 10.7%) and Cheddar cheese (up 6.2%, previously down 6.7%). However, the prices of PMP (down by 1.6%, previously down by 4.3%) and OMP (down by 1.1%, previously down by 6.1%) are still falling," ZPPM points out.
The biggest changes concern the value of contracts whose maturity date is August 24 this year.
The association also emphasizes that the biggest changes concern the value of contracts whose maturity date is August 24 this year. – in the case of anhydrous milk fat, an increase of 9.6% was recorded. compared to the previous session, and in the case of butter, the price of the August contract increased by 10.7%.
“However, this does not mean that milk fat prices on the world market will suddenly increase at the end of August, just as previous declines in contract prices did not mean declines in butter prices. The GDT stock exchange and changes in the value of its index, as well as the prices of individual contracts can be treated as an indicator of long-term trends," notes ZPPM.
The association emphasizes that the prices of butter listed on the GDT, despite significant fluctuations, have remained in an upward trend since approximately August 2023 – similarly in Poland. In the case of OMP, prices of this product have been falling in Poland even since April 2022, similarly on the GDT stock exchange. Average EU prices for these products behave similarly.
Are increases in milk fat prices and decreases in powder prices part of a longer trend?
However, the question remains whether the current increases in milk fat prices and decreases in powder prices are a temporary fluctuation or part of a longer trend?
“Data from the current session of the GDT stock exchange indicate that traders are unsure about the direction of price changes. Depending on the maturity date of the contract, prices will increase or decrease slightly. While in the case of OMP it is more likely that there will be no significant change in the market in the near future, the lack of a clear indication on the milk fat market may suggest that buyers are waiting for additional data such as production volume or weather conditions, but may also be maybe on political decisions – e.g. the Chinese embargo or punitive tariffs on EU food products, in connection with the recent EU decision on tariffs on Chinese electric cars," ZPPM states.
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