![Mixed signals on global dairy markets as uncertainty dominates Mixed signals on global dairy markets as uncertainty dominates](/images/transform/v1/crop/frm/8yYKiJXq2Ks3fRrBZY5gaD/0dc9a35a-6c63-46c5-b45b-8e98df48afd0.jpg/r0_3_3000_1690_w1200_h678_fmax.jpg)
Pricing signals on global dairy markets are mixed as uncertainty - particularly about China - continues.
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The Global Dairy Trade price index was down 0.5 per cent on Tuesday, June 18, after a series of rises.
But the overall result masked big variations.
Although the key whole milk powder price was down 2.5pc, butter jumped up 6.2pc and skim milk powder 0.7pc.
Cheddar was down 1.0pc.
Meanwhile, the Food and Agricultural Organisation latest report showed a 1.8pc lift the Dairy Price Index.
The FAO said the rise in the latest available April index was underpinned by increased demand from the retail and food services sectors ahead of the summer holidays in the northern hemisphere.
It said the market also factored in a fall in production in Western Europe below historical levels.
"Renewed import demand for spot supplies from some countries in the Near East and North Africa also lifted dairy prices," it said.
In the United Kingdom, processors have announced increased farmgate prices for June and July as they seek to secure supplies.
Many have announced prices in excess of 40 pence per litre (75 cents a litre).
Mixed results on GDT
Westpac NZ chief economist Kelly Eckhold said last week's GDT auction was more mixed than other recent auctions.
"Futures markets had suggested a modestly weaker outcome, which did eventuate," he said.
"Chinese buyers pulled back this time, but South East Asian and Middle Eastern buyers took up the slack."
Mr Eckhold said overall prices remained about 10pc above their long-term averages.
ASB senior economist Chris Tennent-Brown said prices were about where the bank expected them to be at this juncture.
Both banks have maintained their forecasts for NZ farmgate prices for 2024/25 at $NZ8.35-$NZ8.40 per kilogram milk solids (AUD$7.70-$7.75), up on this year's price.
Export market uncertainty
ANZ says weak global demand for milk products is expected to continue, particularly in China and South East Asia.
In its ANZ Agri In Focus report released on June 11, the bank said globally milk production forecasts for the remainder of this year wre now flat.
This followed some earlier concern about a lift in production in Europe and NZ.
"These growth forecasts have been replaced by forecasts for stable production, which is on the whole, is good news for Australian dairy," the report said.
"Prices for milk powders, one of Australia's major dairy exports by volume, are expected to remain under pressure this year."
It said there were no strong signals for global price improvements at present on global markets for the products Australian manufacturers make for export.