In the seven-week period ending 29th July 2020, Mintec New Zealand WMP prices rose by 10% to NZD 4,634/MT, attributed to higher export demand from China.
The latest Global Dairy Trend (GDT) event in July saw prices jump by 14% in the WMP price index. While prices for WMP rose across all delivery periods, the largest increase (24.5%) was seen on near-term contracts (August 20 delivery). The rise of WMP prices has been linked to the increased volumes placed on auctions, combined with strong short term demand.
However, the largest contribution to the increase in prices has been due to higher export demand from China, where the foodservice sector has recovered, generating the need for additional short term supply. The resurgence of the Chinese economy from COVID-19, has helped drive WMP prices up which has been supported by China’s GDP growth, up 3.2% in the second quarter year-on-year.
Overall, as New Zealand emerges from COVID-19, along with steady milk supply and higher export demand from China, this will likely support prices further.