Despite last week’s drop in the GDT index, world market quotes for most dairy commodities continue to strengthen as sentiment in global dairy markets swings upwards.

In Europe, butter prices have increased 5% since the beginning of July to more than $3,300/t, while cheddar prices also lifted slightly to just under $3,000/t.

There were also sharp increases in prices from Oceania, with butter quotes rising 7% to $3,000/t. Quoted prices for skim and whole milk powder increased 4% and 5% respectively, but remain relatively weak on the whole.

In the US, cheese and butter prices, at $3,530/t and $5,200/t, remain well ahead of the world market due to strong domestic demand.

Meanwhile, EU exports of butter and cheese continue to surge ahead in 2016. In the January to May period, butter exports from the EU 28 have shot up by more than a third (36%), close to 79,000t, with strongest demand from Saudi Arabia, Egypt and the US.

Cheese exports from the EU are also performing strongly, having increased 15% year-on-year for the January to May period to almost 325,000t.

The US, Japan and Switzerland are the top three markets for EU cheese, although there have been strong increases in shipments to South Korea, Saudi Arabia and Algeria this year.

EU exports of skimmed milk powder are back 12% in 2016, reflecting the glut in global milk powder supply.