Global dairy prices up on tight supply, strong Chinese demand
Chinese buying of dairy goods during Lunar New Year to boost prices in weeks ahead
Global dairy prices rose for the second time this year at an auction held on Wednesday, consolidating farmers’ hopes of a recovery.
Average prices climbed 1.3 per cent at the Global Dairy Trade auction, which takes place twice a month, with an average selling price of US$3,537 per tonne.
The rise reflected tighter supply in New Zealand and Europe, which began pushing up prices last year.
Whole milk powder prices rose slightly by 1 per cent while butter rallied up 4.9 per cent on premium prices in the United States.
“Tight global supply remains an important factor underpinning prices at these levels, with production in most major exporting regions continuing to decline on a year-on-year basis,” said Amy Van Ossenbruggen, analyst at NZX Agri.
“But production should begin to stabilise in the coming months, and this would see some pressure come off prices,” she added.
Strong demand from China even during the Lunar New Year holiday period should help underpin prices in coming months.