Global dairy markets continue to rally after the latest Global Dairy Trade (GDT) auction on Tuesday, with the index increasing by 9.9% to reach its highest point since the beginning of April. With an average selling price of $2,834/t for dairy commodities, this latest increase in the GDT marks the fourth consecutive rise in the index since August.

Volumes sold on the GDT continue to be low compared with previous years. More than 35,000t of dairy commodities were sold during Tuesday’s trade, down significantly compared with the 55,000t sold this time last year.

Butter milk powder made the largest gains, with the average price increasing by almost 14%, while milk powders also sold strongly. The average price of skimmed milk powder (SMP) rose by 13.4%, which was slightly better than the 12.9% gain in the average price of whole milk powder (WMP).

Cheddar gained marginally by 0.5%, while butter was the only dairy commodity to record a decline, with the average price down by 2.3%.

On the demand side, the deceleration of Chinese dairy imports has moderated in July for butter and SMP. Butter imports to the US (+183%), Mexico (+82%) and Egypt (+69%) have shown a remarkable increase. The US is by far the main destination for EU cheese, with a 21% increase in exports year-on-year. Japan, the US and South Korea are the largest importers of cheese in 2015, with increased volumes compared with last year. Russian cheese imports have fallen by 54% as it continues its drive towards greater self-sufficiency.

Closer to home, the board of Ornua met on Wednesday to set its product purchasing index (PPI) at 90.6 for September, down from the August PPI of 91.5. This equates to a September milk price of 26.69c/litre including VAT.