fbpx
Print this page
Wednesday, 18 September 2019 11:25

Chinese demand lifts dairy prices

Written by  Staff Reporters

The rise in global dairy prices could be partially attributed to demand from China, says Westpac market strategist Imre Speizer.

He says Chinese demand for dairy has remained firm despite its economic slowdown and the US-China trade war.

“At last night’s auction, North Asia (a reasonable proxy for China) again bought more than half of the total offering, with South East Asia/Oceania buying around a quarter.

“We continue to expect a further loss in momentum in China’s economy into year-end, which should constrain demand somewhat.

“However, over the longer term, its pro-active responses to recent adversities, via monetary policy stimulus, export diversification, and efficiency gains, should pay dividends.”

The Global Dairy Trade (GDT) price index rose 2%.

NZ's key export product, whole milk powder, rose 1.9%, which was close to the 1% gain predicted by WMP futures market, Speizer says.

All major products recorded gains, with skimmed milk powder up 3.4%, butter up 2.7%, and anhydrous milk fats up 0.6%.

“Prices have been fairly stable since the decline in June, the headline index currently sitting at the three-year average.”

Whole milk powder at $3133 is close to the three-year average of $3060. On the supply side, NZ milk production this spring should be decent given soil moisture levels and warmer temperatures (the latter arriving slightly later than usual).

“Against that, global production remains subdued. Our farm gate milk price forecast for 2019/20 remains at $6.50 (we reduced it a few weeks ago from $6.70). That leaves us toward the lower end of Fonterra’s own milk price forecast for this season of $6.25-7.25.”

Key results

AMF index up 0.6%, average price US$5,030/MT

Butter index up 2.7%, average price US$4,129/MT

BMP not offered

Ched index up 0.4%, average price US$3,846/MT

LAC index up 5.6%, average price US$770/MT

RenCas index down 0.1%, average price US$6,636/MT

SMP index up 3.4%, average price US$2,599/MT

SWP index not available, average price not available

WMP index up 1.9%, average price US$3,133/MT 

More like this

China keeps dairy prices high

Whole milk powder (WMP) prices are now sitting above pre-Covid-19 levels and New Zealand farmers can thank a resurging Chinese economy for that.

China back on track?

Life in China is starting to get back to some semblance of normality, according to MPI’s deputy director general of China Relations.

A ticking time bomb

Our dairy industry risks being exposed to a ‘ticking time bomb’ of unethical players unlawfully passing off New Zealand-made and packed milk powder products in China as supplements for babies.

MPI says it will act

MPI says it takes the claims made by Jane Li seriously and where it has evidence that exporters are not meeting their requirements, it will take action.

Featured

Water reforms come at a cost

The government’s new freshwater laws, signed off this week, have the potential to create significant unnecessary costs for ratepayers, farmers and entire communities, Federated Farmers says.

2020 harvest yields up

Final harvest data for wheat, barley and oats (milling/malting and feed) in 2020 show yields were up 17% overall across the six crops.

 

Difficult but the right call

DairyNZ chief executive Dr Tim Mackle says the joint decision three years ago to eradicate Mycoplamsa bovis was a difficult call.

Milking cluster milks runner-up award

DeLaval has come away with the runner up prize in this year’s Fieldays Online innovation competition with a new milking cluster that eliminates the need for conventional liner changes.

Glow worms to cows

Thomas Lundman's work focus has gone from tracking tiny critters in pitch black caves to looking after considerably larger animals in paddocks near Whakatane.