New Zealand: North Asian buyers like China take long position on milkfats

Record daily volumes of future trades for butter and anhydrous milk fat suggest Chinese buyers are securing their needs and prices ahead of an anticipated lift in the physical market. NZX dairy derivatives data and insights manager Stuart Davison said the SGX-NZX futures market on February 9 set daily volume records of 4464 lots of butter, up 35% from the previous record, and 1800 lots of AMF, up 50%. The purchasing pattern of monthly contracts was spread out to May 2024 for butter and September 2023 for AMF. Davison said that shows a buyer or buyers of milkfat products in North Asia expects global dairy prices to keep steadily rising through a good part of New Zealand’s next dairy season. Fonterra is the most likely seller of those butter and AMF futures contracts, he said. “China has had active milkfat buyers over the past six months even while its milk powder purchasing has been slow,” Davison said. “Record volumes of milkfat imports have been set this year. “The dairy market ...