By Prashant Tripathi, Dairy Market Analyst | April 1, 2025
The latest Global Dairy Trade (GDT) Event 377 delivered a modest uplift to the GDT Price Index (+1.1%), with product-specific shifts reflecting seasonal supply constraints and evolving regional demand dynamics. Notably, Skim Milk Powder (SMP) emerged as the clear outperformer, while Butterâafter six straight gainsârecorded its first decline. Anhydrous Milk Fat (AMF), meanwhile, continued to rally.
đš Skim Milk Powder Takes Center Stage (+5.9%)
SMP led the rally with a sharp 5.9% price increase, reaching an average of $2,876/MT (âŹ2,659). This performance not only reversed the recent downturn observed in the Pulse auction but also exceeded pre-event bullish expectations.
The rally was driven by:
- Tightened supply: SMP volumes are down 34.3% YoY.
- Strategic product positioning: Fonterra withdrew all Contract 1 (C1) SMP offerings, pushing buyers to compete over C2 and C3 slots.
- Heightened demand: Strong buying from North Asia and Southeast Asia/Oceania reflected tightening pipelines and elevated forward bookings.
This surge suggests a bullish outlook for SMP in the near term, particularly as buyers frontload procurement amidst supply-side uncertainty.
đ§ Butter Eases (-1.2%) as AMF Rallies (+2.3%)
Butter prices slipped by 1.2% to $7,602/MT (âŹ7,029), marking the first decline after six consecutive upward moves. Interestingly, the fall coincided with a 14.9% increase in auction volumes, indicating a price correction rather than demand weakness.
In contrast, AMF gained 2.3%, settling at $6,705/MT (âŹ6,199). With seasonal supply limitations coming into play, AMF appears to be firming faster, possibly signaling an upcoming price convergence between Butter and AMFâa trend worth tracking for ingredient strategists and industrial buyers.
đ§ Mixed Bag for Other Products
- Cheddar Cheese posted a +1.7% increase ($5,018/MT), continuing its steady upward trajectory.
- Whole Milk Powder (WMP) remained essentially flat at -0.1%, holding ground at $4,062/MT (âŹ3,756)âan outcome in line with expectations amid balanced market conditions.
- Mozzarella (-4.0%), Buttermilk Powder (-5.6%), and Lactose (-2.6%) experienced declines, likely reflective of seasonal fluctuations and reduced end-user buying.
đ Regional Buyer Insights
Demand growth in North Asia and Southeast Asia/Oceania played a pivotal role in shaping the event outcome. While European buying remained stable, it lacked the momentum observed in Asian markets. Notably, the overall product volume was down 10% YoY, further intensifying competition among buyers and amplifying price sensitivity.
đ§ Strategic Takeaways
- SMP is back in the spotlight â Expect continued volatility and upward pressure as global supply remains tight.
- AMF-BUTTER dynamics â Watch closely as AMF shows signs of decoupling and outperforming.
- Cheddar and WMP stability â A signal of maturing price discovery in these categories.
- Asia remains the key battleground â Strong forward bookings from this region could continue shaping future auction trends.
đ Market Implication
The GDT Event 377 underscores a market recalibrating around scarcity, contract strategy, and regional purchasing behavior. With another GDT event on the horizon and futures markets pricing in tightness, processors and traders would do well to hedge exposures and secure coverage, particularly for SMP and AMF.
