Global Milk Surplus Causes Drop in Dairy Prices at GDT Auction

This decline continues a trend observed since August when WMP was priced at $4,036 per metric ton. The persistent slide in prices indicates weakened buyer momentum and increased market hesitancy.

Cristina Alvarado, head of dairy insights at NZX, commented, "The result reflects a market weighed down by abundant milk supplies fr om New Zealand, Europe, the US, and Argentina, while demand has softened following heavy buying earlier in the season."

The seasonal buying cycles have also contributed to reduced urgency, as buyers align their purchases with key consumption periods such as Christmas, New Year, Chinese New Year, and Ramadan.

Despite strong export flows, particularly from New Zealand, wh ere WMP exports rose by 12% year-on-year in September, buyers have maintained a cautious approach, purchasing only as needed. This hand-to-mouth pattern is evident in the muted import demand from Southeast Asia and Oceania.

With milk production remaining high and inventories well-stocked, the global dairy prices are expected to face continued downward pressure in the near future, unless there is a significant change in supply or demand dynamics.