The winning streak of Global Dairy Trade (GDT) auctions continued this week, with Tuesday’s auction raising the index by 4.3%.

This is the third consecutive auction where the index increased by over 4% and the combined increase over the last four auctions is 16%.

The quantity of product sold at this auction has dipped a bit, with just under 36,000t shifting. The main gains were in powders, with whole milk powder (WMP) rising by 4.2% and skim milk powder (SMP) by 4.3%. Between them, they make up over three-quarters of all product sold at the auction.

Prices on the European spot market edged up again this week, but at a lower rate compared with last week, with WMP increasing by €35/t to €3,535/t, SMP up by €45/t to €2,540/t, butter up €40/t to €4,820/t and cheddar cheese bucking recent trends and increasing by €85/t to €3,895/t.

The last four weeks have been good for dairy trade, with stronger evidence emerging of increased demand in the market.

New Zealand bank ASB has lifted its milk price forecast for the production year on the back of the rising GDT, saying that price rises for forward contracts are also showing strong evidence of increased demand in the medium term and that the current price gains are not a short-term blip.

The bank says that China still isn’t active in the market and that this is concerning, given it still has high domestic WMP stocks, but that these are “stable rather than growing”. It also says that the poor Chinese economy is dampening dairy demand.