National Australia Bank’s Australian dairy export price index rose 10.2 per cent from December 2018 to January 2019, in what is the biggest monthly gain since 2016, according to the latest Dairy In Focus report, released today by the bank.
While the Global Dairy Trade (GDT) price index was pushed 4.2 per cent higher by slowing supply growth, the flow-on benefits were tempered by tough seasonal conditions and associated cost pressures.
NAB agribusiness economist, Phin Ziebell, said the increase in the GDT index was largely attributable to slowing supply and depleted European stocks.
“The price is being driven by reduced supply growth and a sharp rundown of the European Union’s skim milk powder stockpile. The United States and New Zealand are also close to the top of their five-year production ranges,” Mr Ziebell said.
“While these price increases are certainly welcome, our forecasts aren’t showing any major gains for global prices in USD terms over the coming months.”