1 June 2020
The Australian dairy export index declined this week, with a stronger Australian dollar in addition to weaker cheddar and butter prices.
In spot quotes from Australasian exporters, cheddar fell US$100/t from the prior week to US$3,830/t. Butter prices also dropped – down US$30/t from the previous week at US$3,830/t. WMP quotes were unchanged from the previous week at US$2650/t. SMP prices were stronger however, up US$150/t from the previous week to US$2,600/t.
The Australian dollar increased against the US dollar, ending the week at US$0.6668, pushing back to pre-COVID levels as the RBA maintains interest rates in a low band, but acknowledges that better than expected public health outcomes may reduce the negative economic impact.
The combined impact of these factors pruned 5.4 points from the index which now stands at 214.2, a 30-week low.
The weekly spot commodity milk value (CMV) for southern Australian dairy manufacturers fell 24 cents to $5.97/kgMS.
It should be noted that some Oceania spot prices quoted have been slow to respond to wider global trends, given limited spot trade availability. The critical price for the Australian dairy industry is cheddar, if quotes were reduced to US$3,350/t (roughly where EU prices are currently) the CMV would be $5.34kgMS. While we will continue the Oceania series we have tracked for many years, we would urge some caution in interpreting the numbers under the current circumstances.
Take Note: – The index is an indicator of spot trends in gross export returns to the Australian dairy industry based on quoted Australasian dairy commodity export spot prices, movements in currency and the mix of total milk usage in product exports by the Australian industry.
This index was set at 100 on 1 January 2000.
Freshagenda’s Australian Dairy Export Index is an indicator of spot trends in gross export returns to the Australian dairy industry calculated by Freshagenda
The Australian Dairy Export Index is an indicator of average spot quotes from Australian exporters and in one of many ways specialist food industry consultants Freshagenda monitor developments in Australia and global dairy markets.
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