What we’re seeing this week
This week we’re discussing the seventh consecutive negative GDT result. It was an anticipated event after Fonterra announced last week that volumes offered at auctions would be cut from August. Would that spark some urgency in buyers? I guess we know the answer to that!
The GDT price index dipped 2.9% as powders took the hit in contracted prices, fats and cheese steadied but demand was down across the board.
We also take a look at the latest global trade numbers – way back in May. Trade volumes, measured in milk solids equivalent was up 4.8% year on year – on weak COVID-affected 2020 comparables, but still up on “normal years”.
China continues to lead the pack in terms of importing markets with SE Asia a distant second.
Chart of the week
European prices are trending down across commodities with butter falling below the €4,000/t mark. Butter from the Netherlands hit €4,150/t at the start of June, but has since declined, sliding to €3,850/t last week. German butter fell to €3,850/t this week, down from its high of €4,075/t in early June.
The gap in SMP prices is standing at €100/t with SMP from Germany priced at €2,560/t while SMP out of the Netherlands sits at €2,460/t. SMP prices have fallen around €200/t since early June. As commodity values decrease, the average EU raw milk value, estimated by the German-based IFE institute, has fallen 2.1c in the past five weeks to 35.2c/kg.