GDT auction in the red for the second time: -2.9% butter fats with strong discounts The second Feb. 20 campaign of the Global Dairy Trade ended again with a 2.9% reduction in average prices. This time the butter fats performed disproportionately poorly. At 28,181 t, sales were lower than in the pre-auctions. The background to the poor results is likely to be the coronavirus epidemic, with the economic constraints that have led to a slowdown in demand. Whole milk powder (VMP) was once again given continuous discounts of around - 2.6% in all delivery dates. As the largest buyer, China appears to be holding back on its purchases. Skimmed milk powder (MMP) was in high demand with a plus of 4.7% in the front delivery month of March, but the back dates consistently achieved price discounts between -0.7 to -3.3%. In this case, too, a significant Chinese influence can be assumed.Butter-pure fat suffered the highest price losses with an average result of -5.5%. The high discounts of -5 to -8% from March to May 2020 made a decisive contribution to this. Pure butter is mainly traded in the Asian region. The virus epidemic may also have played a role here. In contrast to the pre-auction, normal butter could not escape the pull of the rest of the price development this time. With -3.9%, the positive results of the previous auctions were closed again. At an international level, the coronavirus epidemic is causing a clear reluctance to trade across regions. The milk market is no exception. In a multi-year comparison, however, it can be seen that prices continue to be based on the average, albeit tending towards the lower midfield . At EEX Leipzig , the courses for butter and skimmed milk powder gave way again after a brief soaring after the turn of the year in February 2020.
