In April, the price of milk powders fell, following a sustained upward price movement during Q1 2022. At the 306th Global Dairy Trade (GDT) auction on the 19th of April 2022, whole milk powder (WMP) prices fell to USD 4,207/MT, down by 4.4% compared to the previous auction, logging the third straight decline. In the same auction, skimmed milk powder prices (SMP) dropped for the first time since July 2021 to USD 4,408/MT, down by 4.2% versus the previous auction (5th April 2022). The Chicago Mercantile Exchange (CME) spot for SMP followed GDT, on 27th April dropped by 5% week-on-week (w-o-w) to USD 3,832/MT, a three-month low.
Chinese demand is the main driver for global WMP and SMP consumption. In 2021 China bought nearly ten times the amount of WMP than the second-largest buyer, United Arab Emirates. Chinese dairy imports in Q1 2022 remained firm compared to previous years, but they fell short of the record volumes in 2021. Milk powder prices are under pressure amid concerns that lockdowns in major Chinese cities will hinder demand. As a result, Chinese milk powders imports fell in March, China imported 128.1 million pounds of WMP, down 30% year-on-year (y-o-y), and Chinese SMP imports fell by 27% y-o-y in March. The uncertain demand from China and the upcoming milk collection peak season (May) in the northern hemisphere corrected down milk powders prices in April.
