This is a subscriber-only article
Price sentiment for milk powders amongst traders in global dairy markets has weakened further in recent days. In the aftermath of last week’s GDT auction, where average prices dropped 3.2%, futures markets for milk powders have been in retreat.
April, May and June contracts for whole milk powder (WMP) have declined 5% in price over the last week as buyers took a dim view of the latest decline in the benchmark GDT index. Last week’s decline in the GDT index was primarily driven by another poor showing for milk powder prices. The price of WMP dropped almost 4% to $3,190/t, while the average selling price of skimmed milk powder (SMP) also dropped 4% to $2,575/t.
As can be seen from the red line in the graph below, the futures market price for WMP has declined over 10% since early February and is currently at its lowest point since October last year. While never set in stone, the futures market for WMP can act as a decent bell weather for buyer sentiment in global dairy markets.
Having rallied strongly from July through to November, the price of WMP achieved at GDT auctions has now dropped a cumulative 11% since early December. This week’s decline was a result of increased volumes available for sale, with Fonterra offering almost 14,000t of WMP to the market, which is 5% more product than the previous auction.
SHARING OPTIONS: