The Global Dairy Trade (GDT) Auction Comes off Recent Record Highs

At yesterday’s Global Dairy Trade (GDT) auction, the overall price index edged down 1% from the previous event to $4981/mt. It is the second successive fall after the price strength in the index recently. A total of 159 bidders, 18 less than that in the previous event, participated in event 305 auction of dairy produce with 101 winning bidders. The maximum supply stood at 23,460 mt while the minimum supply was at 20,190 mt. The total quantity sold was however 21,511 mt. Whole milk powder (WMP) and skim milk powder (SMP) registered the largest volumes sold at this event.

Strong gains in butter milk powder (BMP) which went up 6.3% to sell at $4461 and cheddar also up 2.7% to $6472 were offset by losses in other products offered. The price indices for whole milk powder (WMP) and anhydrous milk fat (AMF) fell 1.5% and 2.5% to $4532 and $6908 respectively. Interestingly, butter and lactose also suffered losses, with both of their price indices falling by 0.6%. Butter ended at $6891 and lactose at $1598. Sweet whey powder (SWP) is the one product not offered at this event.

It's quite ironic that amid rising dairy commodity prices globally, the GDT price index has bucked the bullish trend and fallen twice in 3 weeks. The reason lies in dwindling demand from China. China, having been hit with a new wave of Covid-19 has put in strict lockdowns in some of its provinces. Chinese purchasing from the GDT has thus fallen according to market sources.