Global Dairy Trade auction edges up 3.1%
© Tim Scrivener The global dairy trade auction, an indicator of dairy market sentiment saw its third consecutive rise on Tuesday (18 May), increasing by 3.1%.
The rise – the largest of the three, was buoyed by the strong performance of the auction’s two most traded commodities, skim milk powder (SMP) and whole milk powder (WMP).
See also: Look to future markets to cut volatility, farmers told
SMP experienced a significant price rise of 7.1%, to US$2,044/t (£1,602.50/t), while WMP rose by 3.5% to a weighted average price of US$2,998/t (£2,350.40/t).
The rises were largely reinforced by disruption caused by cyclone Cook in Oceania and record levels of trading on New Zealand’s NZX dairy future’s markets last week.
Meanwhile, in Europe, SMP prices have plummeted since the beginning of the year.
Poland, Lithuania and Germany put forward a combined 1,201t of SMP into intervention last week – the first time the powder has been offered in 2017.
SMP stocks on the continent continue to hang over the market, sitting at 375,300/t, with just 40/t being bought from the commission via a tendering process.
Approaching intervention
EU SMP prices sat £90/t above intervention levels in the week ending 9 April, but with production approaching its spring peak, some buyers are seeing intervention values as the better option, according to AHDB Dairy.
Elsewhere in the auction, cheddar (+6%) lactose (+1.2%) and butter (+2.9%) all rose, taking the auction’s price index to its highest level since 20 February this year.
Despite the index sitting 1.6% down on the beginning of 2017, it remains 52.9% up on the same auction 12 months ago.