The "Global Dairy Trade" (GDT) index rose 1.2% to 1164 points in the last trading session. At first glance, this rise was not significant, but at the same time it is a significant signal for the global market.

The GDT index broke through the ceiling, albeit modestly. The dairy price index reached its highest point in two years at 1162 points on 4 June this year.

In the last trading session of the GDT, the most expensive items were lactose (+6.7%), butter flour (+5.0%), Cheddar cheese (+3.8%) and whole milk flour (+3.0%).

Mozzarella cheese (-7.7%), butter (-1.4%), skimmed milk flour (-0.6%) and buttermilk (-0.1%) fell.  

Remember that GDT trading sessions are held twice a month.

What to expect in the future?

The last time the GDT index crossed the 1160-point mark was exactly two years ago – on 4 October 2022. Then it reached 1166 points. In September of that year, it had risen as high as 1208 points.

In other words, the results of the last trading session give dairy market participants more optimism for the future.

On the one hand, for processors it may mean higher profits and farms can expect at least a slight increase in raw milk farm gate prices. On the other hand, the economic war between the European Union and China, for which the foundations have already been laid, may have an impact on the milk market, and thus on the agricultural market as a whole, in the longer term.

On Friday, EU countries gave final approval to a 35% tariff on Chinese-made electric cars (instead of the current 10%), despite strong opposition from Germany and a warning from China not to do so. Experts are now saying that a real economic war between the EU and China could break out, because China never tolerates such a slap in the face. This war could involve all areas of the economy, and China is a very important market for the EU's agricultural production.

Thus, as the GDT index rises above the upper limit of the chart, one should be cautiously optimistic, as the situation could change quite quickly.

„Global Dairy Trade“ trading floor is owned by the agricultural cooperative „Fonterra“. Trends in the Oceania area will reach Europe in about 1.5-2 months.