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Market Commentary

Dairy markets entered 2020 with supply and demand finely balanced. Fears over the rapid spread of coronavirus (Covid-19) illustrates once again the vulnerability of global dairy markets to external market shocks.

Market sentiment is affected with supply chain concerns in China and wider concerns related to the global economic impact of the virus. The GDT auction declined by 2.9% on 18th February with WMP and SMP prices weaker due to coronavirus concerns, offset by drought warnings in New Zealand.

The EEX Butter Index is at €3517/tonne with the Dutch quotation at €3500/tonne. The SMP Index is at €2553/tonne. The cheese market is firm supported by solid trade. In 2019, total EU dairy exports were 6% more than last year, with SMP exports up 17.2% at 962,517 tonnes, while butter exports were up 41.5% at 183,394 tonnes. Cheese exports were 5.7% higher at 832,028 tonnes.