Global Dairy Trade: Middle East lifts milk market

An international cheese glut is easing as the year ends, which is providing a competitive boost for Australian dairy. Here’s why.

Cheddar jumped nearly 10 per cent in the latest Global Dairy Trade results, easing a commodity crunch that has led to a flood of cheap cheese from New Zealand.

The headline figure on the GDT index rose 1.6 per cent in overnight trade to sit at $US3323 ($A5041), with Middle East buyers outpacing their Chinese rivals.

Cheddar was the standout performer with an impressive rise of 9.7 per cent to an average of US$3986 ($A6047) per tonne.

Jarden market analyst Mike McIntyre said higher oil prices may have boosted Middle East buyer confidence ahead of the latest GDT trading session.

“We’ve seen good demand from the Middle East as well as ongoing demand and growth from southeast Asia,” he said.

“So long we can find a home (for dairy produce), it doesn’t matter if it’s China or one of the other regions.

“Obviously, there’s a correlation between oil and most other commodities (in this instance).”

Cheese prices were up in this week’s Global Dairy Trade session. Picture: Zoe Phillips

Data published by Dairy Australia today confirmed 27 per cent of dairy consumed in Australia last financial year originated from abroad — mainly the US and New Zealand.

The latest ABS data shows Kiwi butter shipments are up 62 per cent in just 12 months to the end of June; milk is up 74 per cent; and even ice cream, up 105 per cent.

Mozzarella was offered in GDT trade for the first time overnight, with its debut averaging at $US4005 ($A6076) per tonne.

“There have been a whole lot of new sellers come onto GDT (in the past) six months to a year and as a result, there’s a whole lot of new origins and new products,” Mr McIntyre said.

“The fact we’re seeing these different price points from different origins … makes comparison a whole lot easier, because it’s all on the same platform.”

The latest GDT data coincides with the release of Rabobank’s global milk supply outlook, with sluggish growth expected across most export regions.

Rabobank senior dairy analyst Michael Harvey said he expected a slow recovery in dairy commodity prices in 2024 back to long-term averages.

“The milk supply export engine never fully fired on all cylinders in 2023 and declined year-on-year in the third quarter by 0.2 per cent,” he said.