Global dairy prices fall for fifth auction in a row on robust supply
Global dairy prices fell for the fifth time in a row at an auction early on Wednesday as supply remained robust from largest seller New Zealand and other areas of the world.
The GDT Price Index dipped 0.3 percent, with an average selling price of $2,885 per tonne at the fortnightly auction. The index fell 1.9 pct at the previous sale, according to GDT Events.
Prices for the most widely traded item, whole milk powder (WMP), fell 0.9 percent.
A strong recovery in production in New Zealand, as well as in Europe, the United States and Latin America, mostly because of favourable weather, was pushing prices down despite strong demand, particularly from Asia.
Last week, New Zealand’s Fonterra Group Ltd lowered the price for farmgate milk - the price the company pays farmers - citing stronger global supply.
“Favourable weather has helped NZ production run at more than 5 percent ahead of this time last season,” said Nathan Penny, senior rural economist at ASB Bank.
A total of 41,945 tonnes was sold at the latest auction, falling 0.1 percent from the previous one, the auction platform said on its website (www.globaldairytrade.info). The auctions are held twice a month, with the next one scheduled for Nov. 6.
The auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation’s gross domestic product. The kiwi currency showed little reaction to Wednesday’s auction.