Global dairy prices fall for third time in a row
Global dairy prices slipped for the third time in a row at an auction held early on Wednesday, as the volume of product on offer climbed.
The Global Dairy Trade (GDT) Price Index dipped 3.8pc, with an average selling price of $3,208 per tonne, in the fortnightly auction. The index fell 3.4pc at the previous sale.
The price drops, which were broad-based across most products, were likely due to ramped up supply, according to analysts.
A total of 24,239 tonnes was sold at the latest auction, an increase of 22pc from the previous one, the auction platform said on its website.
Prices for whole milk powder fell 4.3pc, the sixth sale in a row prices for the most auction’s widely traded product had dropped.
Although forecasts of lower US milk production could support prices over the coming months, analysts cautioned that signals pointing to slower demand posed a risk.
“Slowing economic conditions in some of our key trading partner economies, including China and some European countries, signal headwinds for prices,” said Satish Ranchhod, senior economist at Westpac Bank in New Zealand, the world’s largest dairy exporter.
The auction results can affect the New Zealand dollar as the dairy sector generates more than 7pc of the nation’s gross domestic product. However, the Kiwi currency was largely flat at around $0.6527 on Wednesday morning.
GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd, but operates independently from the dairy giant.
U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.
A number of companies, including Dairy America and Murray Goulburn, use the platform to sell milk powder and other dairy products.
The auctions are held twice a month, with the next one scheduled for July 2.
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