Australian dairy export prices are forecast to rise three per cent in 2015-16 to average $A3482/tonne, and the value of Australian exports to increase by 3.2 per cent.
The latest forecasts are available in the NAB Agribusiness Dairy in Focus report, released during
International Dairy Week at Tatura.
International dairy markets saw a tumultuous 2015, driven by weaker global demand, particularly
from China, combined with adequate supply of most dairy products.
NAB’s Murray Valley Regional Agribusiness manager Dave Davies said Australian
producers were shielded from much of the global dairy price tumult in 2015 by a low Australian
dollar, and this was likely to continue in 2016.
``The AUD is already off by more than five per cent against the United States dollar since the start of the year and this will provide support to prices. The Australian dollar is expected to reach as low 0.66 at the end of the second quarter, 2016,’’ Mr Davies said.
NAB sees the currency tracking lower in the first quarter of 2016 and has revised down the
AUD/USD forecasts to 0.67 in the first quarter (previously 0.68), climbing to 0.69 at the end of 2016 (previously 0.70).
``Australian prices are also likely to be supported by the ongoing international interest in our
products,’’ Mr Davies said.
``Free trade agreements such as the China Free Trade Agreement will only help this
trade, especially if we can operate on a more level playing field with the New Zealand industry.’’
The NAB weighted dairy export price indicator started 2015 at A$3309.25/tonne, and after some considerable variation ended a little higher at A$ 3351.68/tonne. It is expected to approach A$4000/tonne in the fourth quarter of 2016.
NAB’s measure of dairy export prices, based on Global Dairy Trade (GDT) auction results, is
weighted by the quantity of Australian exports for whole milk powder, skim milk powder, butter and cheese.