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Analyst says less Chinese demand affected GDT index

The most recent Global Dairy Trade event saw prices fall again, with the index down 4.6%.  Market expert Jon Spainhour from ever.ag tells Brownfield the big price hits were on whole milk powder and skim milk powder, partially due to less demand from China. “Chinese demand is still present on the GDT but what we’ve seen here over the course of the last three or four months is that Chinese demand just isn’t as robust as it had been.”

Spainhour says during the pandemic, China’s purchases were often more than 20% higher, but Chinese purchases are up just 3% year-over-year and they have increased domestic production along with lower demand due to recent pandemic lockdowns.  Spainhour tells Brownfield other regions like Southeast Asia and the Middle East have increased their demand. “And even some business out of Europe and out of Africa as well. These other regions that aren’t typically such a significant buyer, they’ve stepped in and they were purchasing, and that really helped keep prices supported.”

Spainhour says he believes China is closer to the end of lockdowns than the beginning, so they will step back into the world dairy market at some point.