THE Australian dairy export index retreated slightly this week, down 0.7% due to a higher Australian dollar and despite stronger butter prices.
In quotes from Australasian exporters, butter prices rose US$100/t to US$4,300/t. Milk powder prices were unchanged, with SMP at US$2,650/t after last week’s surge, while WMP stayed at US$3,500/t.
Markets are contemplating conflicting signals, with lower milk supply in all major exporting regions but the US. On the other hand, the European Commission’s decision to go ahead with a tender round to test buyers’ appetite for SMP intervention stocks much earlier than expected appears to have buyers more relaxed about supply. Cheddar prices also stalled at US$3,700/t this week.
The Australian dollar ended the week higher at US$0.743, boosted by stronger bulk commodity prices, especially the price of iron ore which is Australia’s largest export items. The US dollar rally also took a break as Americans celebrated Thanksgiving.
These factors combined to prune 1.5 points from the index, which now stands at 205.2.
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.