Dairy product prices fell to the lowest level since January 2013 in the latest GlobalDairyTrade auction, paced by a drop in butter and anhydrous milk fat.
The GDT price index fell 4.9 percent to US$3,595 a tonne, the ninth slide in the last 10 auctions. Some 41,513 tonnes of product was sold, up from 31,984 tonnes two weeks ago.
Despite the decline in global dairy product prices this year, New Zealand posted its seventh monthly trade surplus in May, driven by exports of milk powder, butter and cheese. Exports rose 13 percent to $4.6 billion in May from the year earlier month, led by dairy exports to China. Economists, though, say lower dairy prices are starting to show up in trade data.
In the latest GDT auction, butter slumped 13.6 percent to US$3,181 a tonne, anhydrous milk fat decreased 7.4 percent to US$3,606 a tonne, while whole milk powder fell 5.4 percent to US$3,459 a tonne.
Cheddar slid 2.9 percent to US$4,226 a tonne, while rennet casein fell 2.1 percent to US$10,789 a tonne, and skim milk powder inched 0.9 percent lower to US$3,810 a tonne.
Butter milk powder rose 4.0 percent to US$4,135 a tonne.
Milk protein concentrate wasn't offered at the event, while lactose either wasn't offered or wasn't sold at this event.
Ahead of the release of the latest GDT data, the New Zealand dollar was trading at 87.78 US cents at about 2:50am Wellington time. After the release of the latest GDT data, the kiwi rose as high as 87.86 cents and recently traded at 86.79 cents.
There were 149 winning bidders out of 184 participating bidders at the auction over 12 rounds. The number of qualified bidders was 702, up from 690 two weeks ago.
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