Because the supply of milk in New Zealand is shrinking, prices for dairy products on the world market have risen so much yesterday, as they have not since May last year.
The Global Dairy Trade Index (GDT) rose 2.2% yesterday in the first auction this year. Last week, Fonterra, the world's largest dairy exporter, lowered its forecast for milk deliveries in New Zealand.
The average selling price for a ton of dairy products yesterday was $ 3,124 / ton. The increase was even 4.2% for whole milk powder.
In many parts of New Zealand pasture regions, it has been too dry for weeks and the feed basis for the cows, which are kept only on pastures, is smaller. The dry weather should remain for the time being and the forecast for the milk volume in 2017/18 drops by 3%.
The New Zealand Dairy Cooperative Fonterra has 10,500 farmers as members and controls about one third of world trade in dairy products.
In the previous auction 14 days ago, the dairy index fell by 3.9%. It was the fifth decline in the last six auctions. Yesterday, 25,400 tonnes of dairy were sold. That was 14.2% less than in the previous auction.
Milk giants such as Dairy America and Murray Gouldbourn also use Fonterra's auction platform to offer milk powder and other products. Around half of the buyers are Chinese, who in addition to their own milk production have a great need to buy on the world market.
Text: HANSA Derivatives Trading GmbH /
