Skim Milk Powder Leads the Pack to Drive Strong Gains at the Latest GDT Auction

The recent Global Dairy Trade (GDT) auction on Tuesday 15th of February rose 4.2% to an average price of $4840/mt from the previous event. The 4.2% rise in the price index makes it the third successive increase around the 4 percent plus region.

The quantity of products sold was 27,726 mt. With a total of 180 participating bidders, the number of winning bidders registered was 116 at 19 bidding rounds which took 2 hours and 36 minutes to trade. The strong numbers seen over the last 3 auctions added to push the price index to 1,516 - this is the highest it has been since Q2 of 2013 when strong price averages pushed the index to 1,573.

Skim Milk Powder was the biggest winner at the last event, trading 6% up to $4,295/mt. Although Butter Milk Powder (BMP) was not offered at this event, Butter followed the uptrend making strong gains up 5.1% to $6,686/mt. Whole Milk Powder (WMP) which rose 5.8% and drove the 1st of February auction continued its upward trajectory a second time rising 4.2% for an average price of $4,503.

Cheddar and Lactose were closely at par and made gains of (+3.5%) to $5,881/mt and (+3.4%) to $1,609/mt respectively. Anhydrous Milk Fat (AMF)completed the list with a smaller increase of 1.2% to $6,889/mt.

Weaker fundamental news appears to be a strong driver of the firm GDT prices coupled with stronger demand for dairy commodity products. Cheese demand in Europe and from export destinations is reported to be strong while orders already contracted and waiting to be allocated remain tight. In addition, a lower-than-normal milk production in the southern hemisphere during the flush season meant products being offered in the 1st quarter of this year have been somewhat lackadaisical.