The Global Dairy Trade (GDT) index has seen a slight decrease in the latest trading event, which took place today (Tuesday, March 7).
Today’s event – event 327 – saw the index fall by 0.7%, to a price of $3,403/MT.
The index figure now stands at 1,039, as part of a general downward trend over the last number of months.
Of the five GDT trading events that have taken place so far this year, only one recorded an increase (the event of February 7).
Today’s event saw 124 winning bidders – from 152 participating bidders – across 16 bidding rounds. The event lasted for two hours and six minutes.
Overall, 26,747MT of product was sold.
Across the various product sub-indices, cheddar recorded the largest drop, seeing a considerable decrease of 10.2% to $4,509/MT.
Butter milk powder (BMP) saw a decrease of 4.5% to $2,521/MT, while anhydrous milk fat (AMF) and skim milk powder (SMP) saw decreases of 1.8% and 1.1% respectively (reflecting prices of $5,340/MT and $2,739/MT respectively).
A more marginal decrease was recorded for butter of 0.3%, reflecting a price of $4,899/MT.
Small increases were recorded for lactose and whole milk powder (WMP) of 0.3% and 0.2% respectively (reflecting prices of $1,112/MT and $3,277/MT respectively).
‘Squeeze’ in global dairy chain
In other dairy market news, milk prices in the EU are currently in the middle of a “large price correction” which will result in “tighter on-farm margins from quarter two onward”, according to Rabobank.
In its latest global dairy quarterly report, Rabobank states that “pay-out prices stayed high for too long” in Europe.
The Dutch financial services giant said that these high prices led to a “mismatch between dairy farmers optimising milk production on the back of strong margins and dairy companies accumulating losses on the surplus milk”.
According to Rabobank, the main challenge in the EU is not the milk supply, but the “lack of demand” to absorb the surplus milk.