Whole milk powder set to fall at GlobalDairyTrade auction overnight
The price of whole milk powder, New Zealand's key commodity export, is likely to decline on the GlobalDairyTrade platform overnight, although some analysts say there's no downward trend.
Whole milk powder futures for February last traded at $US3210 a tonne on the NZX, implying prices will slip 1.4% at tonight's auction,
The February whole milk powder contract on the NZX futures market last traded at $US3210 a tonne, down from $US3255 a tonne in the equivalent contract at the last GDT. The March futures contract traded at $US3235 a tonne, lower than $US3270 on the GDT; the April contract traded at $US3225 a tonne from $US3,255 on GDT; the May contract was at $US3270 a tonne from $US3290 on GDT, and the June contract was at $$US3300, from $US3325.
The current correction is more of a consolidation of the market than a downward trend, according to AgriHQ senior dairy analyst Susan Kilsby.
"The market has eased back a little with milk production data from New Zealand and Australia showing some improvements lately (that is, smaller drops than earlier in the season)," Ms Kilsby said. "Also our exporters are facing more aggressive competition in some markets which is putting downward pressure on prices. But, that said, we don't expect prices to fall a lot before the end of this season."
Prices for whole milk powder picked up in the second half of 2016 following a prolonged slump, as demand and supply moved back into balance, with the average price for whole milk powder rising almost two-thirds by December from July. However, average dairy prices dropped almost 4% in the first Global Dairy Trade auction for the year amidst increased volumes on offer, with a slight recovery at the last auction on January 18.