International dairy prices pass peak on GDT

Wednesday, 20 April 2022

Prices on the New-Zealand based Global Dairy Trade (GDT) platform have eased off in the last few weeks, suggesting that sky-high prices may have peaked. The overall price index reached a record high[1] at US$5,065 on the 1 March event. Since then, the overall price index fell by around 1% at both the 15 March and 5 April events, and at the latest event (19 April) it fell by 3.6%. The overall index now sits at US$4,855. All products traded at the latest event saw a decline in price.

  graph of GDT event prices over time

While tight global milk supplies and the need to cover rising costs have supported prices in recent months, there will inevitably come a time when high prices cause a reduction in demand and a subsequent price correction. Some reports indicate that volumes purchased by the North Asia region were particularly weak at the 19 April event. Although GDT is a global platform, it primarily facilitates trades between Oceania and Asia, so demand from that region has a stronger influence on prices.

Overall, prices are still running high despite the recent declines, and it may not be the case that prices in other regions will follow the same path. For example, weekly EU dairy wholesale prices have generally risen through March and the first half of April.

 

 

[1] On our records going back to July 2008


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