International listing of powdered milk plummets

Milk powder prices have reached the lowest level in the international market pressured by weak demand from China and the production even at high levels in some regions, such as New Zealand exporters, United States and Europe.
In the last auction of the Global Dairy Trade platform (GDT), which is a reference to the dairy market, the average price of full milk powder was at $ 1,590 per tonne, the lowest value since the auctions were started in July 2, 2008. In previous auction last July 15, the price had been $ 1,848 per tonne. On the trading floor of the skimmed-milk powder, the average price was $ 1,419 per tonne, also historic low since the auctions began in March 2010. In the previous auction, the average value had been $ 1,702 per tonne. "China is not buying and stocks should be high. In addition, there is information in the market that milk production is also growing in that country ", affirms Valter Galan, MilkPoint analyst, consulting firm specializing in dairy products. China buys about 60% of the full milk powder exported in the world. He adds that New Zealand also registers slight growth in production. The country's economy, largely dependent on exports of dairy products, has been suffering with lower demand for Chinese products.
In addition to increased production in New Zealand, there has also been growth in supply in the European Union and United States, according to Galan. In the first case, the increase in production is stimulated by the end of the quota regime since March this year.
As MilkPoint lifting, between January and June of 2015, China imported about of 49% less milk than in the same period last year, which corresponds to about 3 billion liters in milk equivalent.
In similar period, production in the United States, European Union, New Zealand, Brazil, Australia, Argentina and Uruguay increased by 1.1 billion litres of milk as compared to the same range of 2014, says Galan. This means a surplus of 4.1 billion litres milk equivalent on the market.
On the demand side, the reduction of milk purchases from Russia also weighs on the market, according to the consultant.
He observes that global stocks of milk at the end of the first half were almost 60% over same period in 2014, reaching 561 thousand tons. For the analyst, a dairy recovery must occur between the first and second quarter of 2016. One of the reasons is that the present prices tend to discourage production.