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FAO Dairy Price Index - April 2023

The FAO Dairy Price Index averaged 124.6 points in April, down 2.2 points (1.7%) from March and 22.1 points (15.1%) from its level one year ago. 

In April, international prices of milk powders fell for the tenth consecutive month, primarily underpinned by the impact of the persistent slack global import demand. Increased purchases by China and seasonally declining supplies from New Zealand prevented a potentially steeper fall in the world prices of whole milk powder, while increased current supplies from Western Europe exerted further downward pressure on skim milk powder prices. 

Cheese prices also fell, principally reflecting high export availabilities in Western Europe, where more milk is being channelled into cheese production amid the seasonally rising milk output. 

By contrast, world butter prices remained largely stable, as increased supplies were generally adequate to meet increased import demand for near- and long-term deliveries.

Date Butter Skim Milk Powder Whole Milk Powder Cheddar Cheese
2021 4995 3181 3855 3816
2022 6608 3865 4253 4535
2023-01 5290 2915 3507 4986
2023-02 4968 2781 3424 4809
2023-03 5021 2737 3410 4652
2023-04 5032 2676 3285 4580


However, we are seeing reversal of downward trend in the GDT auctions held recently with overall index up by 3.2% in mid-Apr & 2.5% on 3rd May with increases in Butter (2.4%), Cheese (4.5%) and milk powders (1.5% for SMP & 5% for WMP), implying return of demand from China as well as other petrodollar countries like Nigeria & Algeria apart from what looks like bottom achieved in milk pricing in Europe.

This signifies, some upward movement of milk prices, which would thereafter stabilise at that level by July or so.

However, situation in India is still tight with dairy commodity prices keeping up (further buoyed by announcement that India wont import commodities at this juncture). However, some green shoots are visible with un-seasonal rains in South & West as well as good signs of production increase during mini-flush in cow milk producing regions. Hope, this leads to increased production by Sep and shall douse the fire caused in commodities, especially Butter & Ghee, in time for high consumption season during festivals.

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