The GDT price index declined amid a slump in prices for butter and anhydrous milk fat. Buyers are hesitant to contract due to rising freight rates caused by higher oil prices following the military-political crisis in the Middle East, as well as increased and cheaper supplies from the USA and the EU.
On Tuesday, April 21, the 402nd GDT Auction took place, resulting in a price index of 1196, which is 34 points (-2.7%) lower compared to the previous auction. The average price for dairy products was 4,143 USD/mt, down 85 USD from the results of the previous auction. During the auction, 14,993 tons of commodities were sold, which is 1,504 tons less than the previous results. The minimum supply was recorded at 14,166 tons, and the maximum at 18,737 tons. 147 dairy market operators participated in the auction, which is 13 companies fewer compared to April 7.
According to the auction results, the price for Anhydrous Milk Fat (AMF) was 6,357 USD/mt, down 9.6% compared to the previous auction. According to CZ Insights, the military-political crisis in the Persian Gulf region, periodic supply disruptions along key maritime routes, and rising oil prices have led to increased shipping and insurance costs for deliveries to the Middle East, North Africa, and South Asia. The strengthening of the U.S. dollar made products even more expensive when converted into importers' national currencies. Higher final product costs in oil-importing countries may restrain demand for higher value-added goods, including dairy products.
The price for Butter at this auction was 5,702 USD/mt, a decrease of 7.9% compared to the previous auction results. According to clal.it, as of mid-April, butter prices declined in the EU, the USA, and Oceania compared to May quotations. As reported by the USDA, demand for butter in the U.S. slowed after the spring holidays, but demand for American butter remains active in export markets as it holds a competitive price advantage over producers from other regions. According to FAO estimates, butter price growth slowed in the EU due to the seasonal increase in milk yields.
High logistics costs are restraining buyer activity. For instance, as reported by Dairy Business Mea, Algeria has been reducing butter import volumes over the last five years. In Oceania, rising food prices in supermarkets are leading to a reduction in consumer demand and the spread of butter-free baking recipes. In the UK, budget butter from lesser-known brands is growing in popularity.
The price for Whole Milk Powder (WMP) was 3,666 USD/mt, decreasing by only 0.6% compared to the previous auction results. According to clal.it, WMP prices rose in the USA and Germany in April but fell in Oceania and South America. Demand remains stable in the USA. According to Dairy Business Mea, large shipments of WMP, primarily from New Zealand, are expected in Algeria between June and September 2026. Dairy demand in Algeria exceeds local production volumes. As reported by AHDB, China has been reducing milk powder imports in recent years, with the government encouraging increased domestic milk yields and seeking alternative sources for dairy imports.
The price for Skim Milk Powder (SMP) was 3,448 USD/mt, up 3.2% compared to the previous auction results. According to clal.it, SMP prices rose in the USA, Europe, and Oceania in April relative to March. Prices are rising amid increased demand and seasonal declines in milk yields in Oceania. According to Dairy Business Mea, large shipments of SMP, primarily from Europe, are expected in Algeria from June to September 2026. Except for Mexico, demand for American SMP remains weak in other countries due to higher prices compared to European and Oceanian products. The EU holds a relative advantage over Oceania and the USA in supplying milk powder to North Africa and the Middle East due to geographical proximity amid rising freight costs.
According to CZ Insights, elevated market risks will likely prompt buyers to increase buffer stocks of commodities, which could support current price growth. Higher oil prices are fueling global inflation, likely forcing central banks to continue raising interest rates. Higher rates increase the cost of financing global commodity flows. Since dairy products are relatively expensive, higher financing costs have a tangible impact in terms of USD per ton. According to the GDT forecast, SMP may rise in price by 1.1% in May and 3.9% in June.
Cheddar cheese became more expensive, reaching 4,798 USD/mt (+1.1%), while Mozzarella fell to 3,850 USD/mt (-3.1%). As reported by clal.it, cheese prices declined in the USA and Oceania in April. According to the USDA, U.S. cheese demand was slow last week, but interest in American cheeses remains high in the Middle East and Southeast Asia. Cheese prices in the EU decreased amid the seasonal spring flush. Rising logistics costs have slowed buyer interest in European cheeses. According to Dairy Business Mea, Algeria has reduced cheese imports over the last five years.
Lactose increased in price to 1,573 USD/mt (+7.2%). According to the USDA, buyers are actively contracting for lactose deliveries for the third quarter, and demand remains strong in export markets. According to the GDT forecast, the price for lactose is expected to rise by 7.2% in June.
The next GDT Auction will take place on May 5.
Press service of the Association of Milk Producers
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