GDT Auction 06 Aug.2019: Price increase Pre-auction reset - Butter weak The Global Dairy Trade (GDT) auction at the beginning of Aug. 2019 could not keep the price increase of the pre-auction. On average of all products and delivery month, the result was -2.6%. However, the handling volume was with approx. 35,000 t 40% higher than in the previous 2 months. The international participation in the auction this time was unusually large. Whole milk powder (VMP) , usually with the largest market share, fell on average by -1.7% . There were differences between the delivery dates. The month of Sep.-19 closed at +4.7%, while the two months at the turn of the year point in the opposite direction at -4.5%. China has a decisive share of buyers, which obviously still had a need for the front, while the rear ones were neglected. Skimmed milk powder (MMP), with the second largest market share, was almost continuously rated at -1.6%, with the exception of the Nov. 19 date.For the newly designated regions, there were some differences in the price level. The highest prices were in New Zealand, which is currently in the low phase of its milk supply. On average butter-fat had to pay more than -5.1% of the price increase of the pre-auction. The price reductions were between -3,4 to -5,5% throughout the delivery month. Nevertheless, one must note that the prices are still well above the long-term average. Normal butter had to cope with the biggest haircuts - 5.5% . Significantly, the forward delivery months contributed -6% and more, while the rear dates were in the moderate minus range. The positive pre-auction results were overcompensated. But even in this case, it should be noted that the prices are still above the average. The low-price summer season usually allows no continuous price increases. In view of the high handling volume , the observed price correction is understandable.While deliveries are steadily declining in the northern hemisphere, the oceanic countries are at the beginning of a new delivery season. The highlight is expected in New Zealand in Oct.19. The increase in deliveries in the south will be offset by the declines in the north again. For the further development it depends decisively on the demand behavior . The slowing global economic growth is not very conducive. China , in particular, will hardly be able to provide any impetus given the low purchasing power of the currency .
