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16 August, Dairy Update

Another week of lower prices for global dairy commodities.

The rising geopolitical tensions around the world are causing consumers to lose confidence. Desktop analysis would suggest that if the world goes into recession- cheese, butter and milk prices have historically declined 30-40% from their peak. While prices for products have moved 15-20% lower (WMP/SMP) - milk prices are still at record highs.

Dairy traders were rattled yesterday after an unconfirmed rumour that China would impose a ban on the importation of Aust and NZ dairy (as well as other ag commodities).

This sounds to be a very extreme move, which has not been verified.

It goes without saying that if China is not in the market to buy NZ dairy products- prices will fall sharply.


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