The recovery in global dairy commodity prices has stalled on the back of weaker consumer demand and reduced Chinese imports, according to the latest market review by Rabobank.

“The jump in prices in late 2023 and early 2024 appears to have been more of a response to low prices and restocking than a sustained improvement in consumer demand in most regions,” the bank states in its global dairy quarterly for the second quarter of 2024.

“China’s reduced dependence on imports will also be a headwind for the global dairy market in the coming months,” it adds.

Rabobank forecasts that increased domestic milk production in China will result in an 8% reduction in net dairy imports this year compared to 2023, with purchases of skim milk powder dropping by 20% to 30%.

Although milk output has fallen back in most of the major dairy regions, Rabobank claims that market sentiment has shifted and international buyers are “turning more cautious”.