This Saturday marks the Chinese new year and a major holiday week for the people of the world’s most populous country. Given its role at the heart of global dairy markets, the lengthy celebrations in China for the new year can often result in a sluggish time for dairy prices.

However, this week’s result from the latest GDT auction in New Zealand suggests appetite in global dairy markets is quite healthy. Average dairy prices gained almost 2% at this week’s auction, with milk powder prices continuing to attract healthy returns.

Average prices for whole milk powder (WMP), the key dairy commodity traded on the GDT platform as it accounts for over 50% of product sold, increased more than 2% this week above $3,230/t (€2,920/t). The value of skimmed milk powder (SMP) continues to trade at five-year highs on the GDT, with average prices up 1% this week to more than $3,000/t (€2,740/t).

On the fats side, butter prices soared 6% to $4,250/t (€3,835/t), while cheddar cheese prices increased slightly (+1%) to $4,050/t (€3,650/t). Data released this week also shows that New Zealand milk production fell slightly (-0.5%) in December to 2.6bn litres.

Closer to home, European butter prices were flat at €3,570/t, while SMP prices gained €20/t to reach €2,620/t. SMP prices in Europe were boosted by strong export demand from ONIL, the Algerian state agency charged with buying milk powder on world markets, which snapped up 30,000t of SMP last week.