Mixed global dairy trade signals
Butter prices took the biggest hit in the Global Dairy Trade auction on Tuesday, with a 4.9% drop dragging the overall average price index down 1.6%, .
However, most market analysts expect the slowdown in milk fat prices may be temporary, despite global butter prices being at record levels.
Of more significance for the EU dairy industry is the 3% fall in the skim milk powder index, with much trepidation over how and when the EU’s huge SMP stocks are released onto markets.
The EU’s SMP exports had been performing well, but the 3% GDT fall may confirm fears the market is weakening due to slower demand, and buyers waiting for lower prices.
Meanwhile sources in Eucolait, representing the European dairy trade, say recent currency developments played into the hands of the US, now the most competitive exporter across the whole dairy product range.
Eucolait also says the first statistical evidence has emerged showing a negative impact on the EU single market of France’s mandatory country of origin labelling for meat and dairy in prepared foods.
Rabobank has predicted that China’s consumption of dairy products will slow to a growth rate at 2-2.5% per year for the next five years, and infant formula sales will continue to grow at 10% per year (down from 15%).
