New Zealand is still struggling to see a real re-ignition in the Chinese market in terms of milk powder sales.
As calving start gets closer in New Zealand, they are watching Chinese numbers very carefully.
The positive angle is that May imports into China were better than expected and New Zealand is hoping they will continue along those lines when calving kicks off.
We saw with the Global Dairy Trade (GDT) result last week that the weaker sentiment in the dairy market is also clearly reflected in the GDT.
The price of butter, in particular, has recorded heavy falls. This impact is big for Irish companies.
With a GDT result loss of 3.3%, the average price dropped back to $3,334 per tonne. This was the largest decline since mid-April.
On the milk protein side, the value improvement wasn’t much more positive, as skimmed milk powder dropped by 6% to $2,525 per tonne.
The positive side of protein is that whole milk powder (WMP) is the most stable factor, with a decrease of 0.4% to $3,149 per tonne. Remember, this GDT is the best indicator of WMP price trends.
We know New Zealand depends on China. The lower prices suggest that China is not back in the market in a big way yet.
Now the talk in the trade is that Chinese consumption is recovering, which could have positive implications for 2024, but we heard that about the back half of 2023 and now we are told it doesn’t look like it’s going to happen now.