Global Dairy Prices Fall Amid Ample Supply, Geopolitical Tensions

(MENAFN) Global dairy prices fell for the second consecutive auction, as surplus supply and mounting geopolitical tensions continued to erode demand and push up operational costs for buyers worldwide.

The average price at the fortnightly Global Dairy Trade (GDT) auction slid 2.7 percent to $4,143 per metric ton, GDT Events Results released Tuesday showed — compounding a 3.4-percent decline from the prior event, which had marked the first drop of the year.

Despite a seasonal pullback in New Zealand's milk output, global supply remained well-stocked, with steady European production amplifying downward pressure on fat values, according to New Zealand's Exchange dairy insights head Cristina Alvarado, as reported by media.

"Ongoing geopolitical tensions linked to the conflict involving Iran are contributing to elevated freight, insurance and input costs," Alvarado said, adding disruptions around the Strait of Hormuz and high oil prices were adding uncertainty, prompting many buyers to delay purchases in hopes of lower costs and clearer logistics.

Mounting uncertainty over shipping routes and energy-driven cost pressures appear to be prompting buyers to hold back, waiting for greater market clarity before committing to purchases — a trend that analysts warn could sustain bearish momentum across dairy markets in the near term.

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