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Global dairy prices unchanged after four consecutive falls

Global dairy prices unchanged after four consecutive falls
FILE PHOTO - A cow is seen near the fence of a pastoral farm near Auckland August 6, 2013. REUTERS/Nigel Marple   -   Copyright  Nigel Marple(Reuters)
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By Charlotte Greenfield

WELLINGTON (Reuters) – 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 percent at the previous sale, according to GDT Events.

The amount of product sold, however, jumped 33.9 percent 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, dairy analyst at Agri HQ.

Whole milk powder, the most widely traded product, rose just 0.1 percent compared with derivatives markets expectations of a 0.8 percent gain.

Butter fell 3.2 percent, but cheddar and anhydrous milk fat eked out 1.3 percent and 1.2 percent 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 overall global supply.

The auction results can affect the New Zealand dollar <NZD=> as the dairy sector generates more than 7 percent of the nation’s gross domestic product.

The kiwi currency dropped from around $0.6750 to $0.6734 in the wake of the auction.

GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd <FCG.NZ>, but operates independently from the dairy giant.

U.S.-listed CRA International Inc <CRAI.O> is the trading manager for the Global Dairy Trade auction.

A number of companies, including Dairy America and Murray Goulburn <MGC.AX>, use the platform to sell milk powder and other dairy products.

The next auction is scheduled for Aug. 21.

(Reporting by Charlotte Greenfield and Bengaluru Commodities Desk; Editing by James Dalgleish)

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