Latest GDT sees price drops
February 17, 2016
The latest GlobalDairyTrade auction saw prices drop 2.8% from the previous auction two weeks ago.
Whole milk powder saw the sharpest decrease, dropping 3.7%. Whole milk powder futures are now down over 30% from recent highs in October.
A generally weak euro combined with a Russian trade ban on EU dairy products makes European product more competitive in international markets. These factors, along with ample European production, have all contributed to the ongoing price weakness internationally.
On top of this, New Zealand production is not falling as fast as first thought with unexpected rain helping local pastures. Original feelings suggested the effects of El Nino may limit rainfall and conduce a summer drought however this didn’t eventuate.
Bank of New Zealand have indicated that production is likely to be down 3-4% this season rather than the 6% fall they first prediction but any production declines in NZ and Australia will be more than offset by European supplies.
Sources: Agrimoney, GlobalDairyTrade