New Zealand’s dairy export momentum improved in September. Despite the seasonal quietness in September, the majority of dairy categories posted growth, driven overwhelmingly by demand from China, which continued to offset persistent weakness across the Middle East and North African (MENA) market.
September also marked the first decline in exports to the EU after ten consecutive months of gains, hinting at a shift in buying behaviour following earlier front-loaded demand and lower competitive prices for the European market.
Within this broader upswing, Whole Milk Powder (WMP) remained the strongest performer. Sales rose for the fourth consecutive month, largely on the back of recovering Chinese demand and additional support from Australia and Southeast Asia. This recovery has been mirrored across the season-to-date, with incremental gains into Sub-Saharan Africa and Sri Lanka. However, the picture is less uniform across regions, as MENA markets — particularly Libya, Algeria, and Yemen — continued to weigh on the overall balance.
This regional divergence is even more apparent in Skimmed Milk Powder (SMP), which extended its five-month decline. Here, the contraction was concentrated in Southeast Asia and MENA, reinforcing the softness already seen in these markets for WMP. Yet, unlike WMP, SMP showed early signs of stabilisation in China, suggesting that the worst of the downside for this category may be behind.
A similar recovery trajectory emerged in butter, which regained momentum through Q3 after a soft second quarter. Each month of the quarter registered growth, almost entirely underpinned by China — now accounting for around one third of New Zealand’s year-to-date butter exports. This concentration mirrors the dynamics seen across other product groups and underlines China’s central role in shaping the current export landscape. By contrast, butteroil broke its strong five-month streak, declining in September. The shift was driven by sharply lower EU demand, a notable reversal from Q2 when Europe had been the primary driver of growth. The slowdown suggests EU buyers may have front-loaded purchases earlier in the year due to elevated domestic prices.
The month closed on another consistent trend: the continued rise in cream exports. Volumes have climbed steadily over the past two years and remained firmly upward in 2025, fueled almost entirely by China, which now absorbs over 80% of export sales. This reinforces the overarching theme across categories — while performance varies market by market, China’s role as the anchor of New Zealand’s dairy export demand has strengthened further.
Image source: Adobe
Written by Jose Saiz
