Global Dairy Prices Unchanged After Four Consecutive Falls
Global dairy prices were flat at a fortnightly auction held early on Wednesday, after four consecutive falls.
The GDT Price Index was unchanged, with an average selling price of $3,136 per tonne, having fallen 1.7% at the previous sale, according to GDT Events.
The amount of product sold, however, jumped 33.9%, compared with the previous auction, to a total of 34,076 tonnes. Nevertheless, buyers from North Asia, including heavyweight China, held back.
"There were fewer buyers from North Asia at this event than at the [previous] event, but the presence of buyers from South-East Asia and Oceania, and from South America, was strong," said Amy Castleton, a dairy analyst at Agri HQ.
Whole-milk powder, the most widely traded product, rose just 0.1%, compared with derivatives markets expectations of a 0.8% gain. Butter fell by 3.2%, but Cheddar and anhydrous milk fat eked out 1.3% and 1.2% gains, respectively.
Prices have been falling in recent months, as production in the world's biggest dairy exporter, New Zealand, started to pick up after weather-related woes earlier in the year, suggesting stronger global supply.
The auction results can affect the New Zealand dollar, as the dairy sector generates more than 7% of the nation's gross domestic product.
GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd, but operates independently from the dairy giant.
US-listed CRA International, Inc. is the trading manager for the 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 next auction is scheduled for 21 August.