‘Global dairy market will remain largely balanced’
Global dairy prices dropped for the third consecutive time at a fortnightly auction on Wednesday as production in New Zealand continued its slow pickup from weaker levels earlier in the season.
The world's largest dairy exporter curbed its supply late last year due to unusually dry weather, but the pasture conditions have since improved.
"We expect prices to remain at or around current levels until the end of the season," Nathan Penny, senior rural economist at ASB, said in a note.
"While (New Zealand) production is improving, the recovery from weak production earlier in the season is progressing only gradually.
“With global demand also firm, we expect the global dairy market will remain largely balanced and for prices to track sideways as a result."
The New Zealand dollar fell to its lowest level since early February at $0.7177. The dairy sector generates more than 7pc of the nation's gross domestic product.
The Global Dairy Trade Price Index dipped 1.2pc, with an average selling price of $3,632 per tonne, auction platform GDT Events said.
The index fell 0.6 pct at the previous sale.