GDT auction 'complete reversal of half the market expectations' in unexpected price surge

GDT auction 'complete reversal of half the market expectations' in unexpected price surge

The Global Dairy Trade Auction witnessed an unexpected price surge of 4.6% overnight, driven largely by dominant Chinese buyers at the Global Dairy Trade event in Singapore.

Davison, fresh from the event, told REX host Dominic George that the event was full of welcome surprises for Kiwis involved in the dairy industry.

"You had whole milk powder up 4.6% as well. Slightly better, I think, than was predicted," said Davison. 

He described the results as a "complete reversal of about half the market expectations," sparking a positive mood among industry players.

Key results from the latest auction include Anhydrous Milk Fat (AMF) was up 5.3%, Cheddar (Ched) was down 1.7%, Skim Milk Powder (SMP) was up 5.4% and Butter was up 3.8%.

Davison, who is in Singapore for a conference, was able to attend the auction and said that seeing it unfold live in front of his eyes was an enthralling experience.

"The tension in the air before the auction was quite palpable, everyone was very excited to see what was going to happen.

"To see the auction happen in front of us was really cool."

He told George that the results have likely swayed a number of opinions overnight and will leave brokers with a very busy day following the auction.

Contrary to what was expected, Chinese buyers were the 'most dominant buyers' at yesterday's auction and really 'drove the whole auction' was 'quite a surprise' to Davison.

Prior to the auction, he admitted there was a lot of uncertainty, a feeling which was clear at the live event.

Although it is not yet clear whether the Chinese buyers are back in the game for the long term or not, Davison is optimistic that two positive results in a row is a small win, if nothing else for the dairy sector.

Listen to the full chat between Dairy Analyst Stu Davison and Dominic George above.

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