- GDT Auction in May 2022: - 8.5%
The first May 2022 Global Dairy Trade (GDT) auction delivered another, but this time sharp, pullback in average auction results. The butter fats were particularly affected. Trading volumes have risen slightly, which is unusual for the time of year. Whole milk powder (VMP) (50% market share) had to accept another discount of 6.5% compared to the pre-auction. The conspicuous month Sep.-22 represents a correction of the pre-auction. The price declines took place in almost all delivery months. The absolute prices decrease to $3,916/t, but still remain at a comparatively high level. Skimmed milk powder (SMP) (auction share 25%) also had to give way repeatedly by -6.5% . The price gains from previous auctions have thus been used up again. However, the listings remain in the high price range of the last 5 years. The negative monthly results show little difference. The absolute MMP prices only reach 4,130 $/t and range below the EEX prices (4.$563/t), but above the US ($4,007/t). After a moderate result in the pre-auction, clarified butter prices (share 10%) suffered sharp price reductions. Only the month of Oct-22 was less affected. The average product price falls to $6,008/t but still remains in the above-average range of the last 5 years. Normal butter (share 8%) again had to accept a strong price reduction of -12.5% for the pre-auction. Prices reset in all delivery months with little difference. The absolute butter price falls back to $5,807/t but still remains in the upper mid-range of the last 5 years. EEX Leipzig is quoted at the equivalent of $7,803/t and the Chicago rates are at $6,018/t. The price reductions of the most recent GDT auction are a result of growing price sensitivity at above-average price levels. Triggers are increasing uncertainties in the marketing chain. At On the buyer side, the limits of willingness to pay seem to have been exceeded.Another reason is the usual summer weakness. According to the most recent findings, the milk deliveries in the 9 major producer countries worldwide have increased again compared to the autumn of last year. In the northern hemisphere, the months of May/June regularly reach their peak. Even if the milk season in the southern hemisphere goes back to the end of July, the global supply is sufficient for the price-related subdued demand. The above-average price reductions for butterfat compared to milk powder prices are a correction of previous price increases.
