The latest Global Dairy Trade (GDT) auction, Event 410 held on 18 August 2026, has strengthened the recovery in dairy commodity prices, with the GDT Price Index rising 2.3% from the previous auction. More importantly, the recovery is becoming increasingly product-specific: SMP, WMP and Mozzarella are strengthening, while AMF, Butter and Butter Milk Powder remain under pressure, signalling that global buyers are still highly selective rather than returning to broad-based stocking.
The weighted average prices in Event 410 show this divergence very clearly. Skim Milk Powder (SMP) rose 7.6% to USD 3,502/MT, the strongest movement among the major powder commodities, while Whole Milk Powder (WMP) increased 3.0% to USD 3,591/MT. This is significant because WMP remains the largest product traded through GDT and its recovery suggests that buyers are increasingly willing to replenish inventories at current price levels.
The other notable positive movement came from Mozzarella, which increased 6.1% to USD 4,234/MT, while Lactose rose 3.2% to USD 1,807/MT. The strength in these two products points towards relatively resilient demand from foodservice, industrial food processing, nutrition and specialised ingredient applications, reinforcing the emerging trend that demand for value-added dairy ingredients is becoming less dependent on traditional commodity buying.
The powder recovery, however, should not yet be interpreted as the beginning of another major global dairy price rally. Buyers appear to be using the lower price levels created during the June-July correction to rebuild inventories selectively, while continuing to avoid excessive forward commitments. This is consistent with the broader GDT pattern, where the market has moved from aggressive buying earlier in the year to a period of correction and is now beginning to establish a more credible price floor. The GDT itself notes that its percentage movements are based on product price indices rather than simply comparing weighted average prices, because changes in available volumes can otherwise distort the apparent movement.
The fat complex tells a very different story. Anhydrous Milk Fat (AMF) declined another 6.0% to USD 5,993/MT, while Butter fell 2.0% to USD 5,090/MT. Butter Milk Powder (BMP), which had been one of the strongest performers earlier in the year, also corrected 3.5% to USD 4,552/MT. The continuing weakness in AMF and Butter suggests that the earlier premium attached to milk fat is being eroded as global milk availability improves and buyers become more comfortable delaying purchases or buying only against immediate requirements.
Cheddar, in contrast, was almost unchanged, increasing 0.6% to USD 3,744/MT. This is a relatively neutral signal and indicates that the cheese market is not participating in the powder-led recovery with the same strength as Mozzarella. The difference between Cheddar and Mozzarella is particularly interesting because it suggests that end-use demand, especially foodservice and processed-food applications, is increasingly influencing individual dairy commodity prices rather than the entire cheese complex moving together.
Taken together, the Event 410 price movement is therefore: AMF USD 5,993, down 6.0%; Butter USD 5,090, down 2.0%; BMP USD 4,552, down 3.5%; Cheddar USD 3,744, up 0.6%; Lactose USD 1,807, up 3.2%; Mozzarella USD 4,234, up 6.1%; SMP USD 3,502, up 7.6%; and WMP USD 3,591, up 3.0%. The overall GDT Price Index rose 2.3%, confirming that the powder-led improvement was strong enough to outweigh weakness in the fat segment.
From the demand side, the most important change is not simply that prices have risen, but where the buying strength is appearing. China remains an important global dairy buyer, but its procurement behaviour has become more disciplined, with purchases increasingly linked to actual consumption and attractive price windows rather than large speculative inventory rebuilding. At the same time, Southeast Asia, the Middle East, North Africa and parts of Africa are becoming increasingly important demand pockets for milk powders, recombined dairy products, bakery, confectionery and food ingredients. This broader geographical spread is helping to create a more resilient demand base even though no single market is currently generating the kind of buying surge that can trigger a major price spike.
The supply side is equally important. Global milk availability has improved from the tighter conditions seen earlier in the year, particularly across the major exporting regions, reducing the urgency for buyers to secure supplies at any price. Recent market assessments indicate that global dairy markets are nevertheless moving towards firmer footing as production uncertainty and changing regional demand begin to offset some of the earlier oversupply pressure.
The GDT index has had a highly volatile 2026 so far. The market moved through a strong rally during February and March, followed by a significant correction during April, a brief stabilisation in May and then a much sharper decline through June and early July. The 4.9% fall in Event 407 was particularly significant, followed by a 1.5% recovery in Event 408, a marginal 0.1% improvement in Event 409 and now a stronger 2.3% increase in Event 410. The sequence suggests that the market may have moved beyond the most severe part of the correction, although it is still too early to call this a sustained bull cycle.
My assessment for the next two to three months is cautiously positive for powders but neutral to bearish for fats. WMP could broadly remain in the USD 3,500–3,700/MT zone, while SMP could move towards USD 3,400–3,600/MT if Asian and Middle Eastern procurement continues to strengthen. Butter and AMF are likely to remain more volatile, with supply availability and the economics of milk-fat utilisation determining whether the current weakness continues or a seasonal recovery emerges. The key upside trigger would be stronger Chinese buying combined with tighter New Zealand and European milk supplies; conversely, comfortable export availability and cautious Chinese procurement could keep the market range-bound.
For India, Event 410 sends a mixed but important signal. The sharp recovery in SMP to USD 3,502/MT and WMP to USD 3,591/MT improves the international value proposition for Indian dairy powders and provides some support to domestic SMP realisations, particularly as India’s own milk availability moves towards the leaner part of the production cycle. At the same time, the 6.0% fall in AMF and 2.0% fall in Butter provides some relief on the international fat-cost side and could limit imported-equivalent pressure on butter and ghee values. However, India’s domestic milk procurement economics remain far more important for processors than GDT alone; tighter buffalo milk availability and the approaching lean season for cow milk can keep domestic milk costs firm even when international commodity prices are soft.
For Indian dairies, therefore, the message from GDT 410 is not simply “global prices are rising.” The more important message is that the global market is beginning to differentiate between commodities: powders are finding buyers, value-added ingredients are gaining traction, while milk fats are still looking for a floor. For Indian processors, this means that product mix, inventory positioning and milk utilisation economics will become increasingly important over the next quarter rather than relying on a single global dairy price signal.
The next few GDT auctions will therefore be critical. If SMP and WMP continue to rise while AMF and Butter stabilise, it would confirm that the market has entered a genuine consolidation phase with a developing price floor. If fats continue to fall despite stronger powders, however, it would indicate that global milk supply remains sufficiently comfortable to prevent a broad-based dairy commodity recovery.
Source: Event Review by Kuldeep Sharma on Global Dairy Trade, Event 410, 18 August 2026. GDT Event Results