Global dairy prices climb higher, volumes drop at auction
Global dairy prices rose for a tenth consecutive time at a fortnightly auction on Wednesday, although prices for whole milk powder (WMP), the most-traded item, eased again due to lower demand.
The GDT Price Index climbed 0.5 percent, with an average selling price of $3,447 per tonne. This was slower that the 0.8 pct rise in the previous auction, according to GDT Events.
Whole milk powder average prices eased by 0.7pc, the second fall in a row.
“We think this is some of the supply premium coming out of prices as concern about the impact of dry weather on NZ milk production eases,” Westpac senior economist Anne Boniface said in a note.
But Anhydrous milkfat (AMF) and butter continued their strong performance with the price indices up 4.2pc and 3.5pc respectively.
A total of 16,166 tonnes was sold at the latest auction, falling 9.5pc from the previous one, the auction platform said on its website.
The auction results can affect the New Zealand dollar as the dairy sector generates more than 7pc of the nation’s gross domestic product.
The kiwi currency was trading down 1.3pc at its lowest since Jan. 2, but the decline followed the release on Wednesday of softer than expected CPI data.