26 July 2021
The Australian dairy export index declined this week, the result of commodity price falls and despite a weaker Australian dollar.
In spot quotes from Australasian exporters, cheddar prices fell US$100/t from the prior week to US$4,300/t. Butter prices were also weaker – down US$10/t from the previous week to US$4,470/t. WMP weakened US$100/t to US$3,850/t. SMP also fell, down US$30/t from the prior week to US$3,100/t. Spot trends took a lead from last week’s seventh consecutive negative GDT result, although SMP values fared worse at the auction.
The Australian dollar was lower, ending the week at US73.7c, continuing its downward trend for the fourth consecutive week as demand for US dollar remains strong at the expense of more risk-sensitive currencies. Extended lockdown as COVID cases surge also contributed, prompting some downgrades to the economic outlook and likely delaying the RBA raising interest rates.
The combined impact of these factors pruned 2.6 points from the index which now stands at 227.4, a 21-week low.
The weekly spot commodity milk value (CMV) for southern Australian dairy manufacturers fell 8 cents to $6.61/kgMS.
Take Note: – The index is an indicator of spot trends in gross export returns to the Australian dairy industry based on quoted Australasian dairy commodity export spot prices, movements in currency and the mix of total milk usage in product exports by the Australian industry.
This index was set at 100 on 1 January 2000.