Global dairy commodity prices have dropped for the third consecutive time in the latest Global Dairy Trade (GDT) auction, driven by the continued decline in whole milk powder prices.
Average prices were US$3,208/t, with the GDT price index down 3.8 percent at the June 18 Global Dairy Trade (GDT) event.
- Cash boost to help dairy industry breed disease-resistant, climate-friendly cows
- 'They need some discipline': Agriculture Minister defends keeping restrictions on Fonterra
NZX dairy analyst Robert Gibson said the result was driven by price declines in all commodities, except for Rennet Casein.
"Whole Milk Powder (WMP) average prices eased on the previous event to US$3,006/t, with the price index also down 4.3 percent," he said.
This is the sixth consecutive decrease in the WMP price index, with price levels decreasing significantly across all contracts, particularly for July (-4.7 percent) and August (-5.3 percent).
"Softer prices likely reflecting a lift volume-driven price decreases in response to more product being sold compared with the previous event," said Gibson.
Skim Milk Powder (SMP) average prices decreased on the previous event to US$2,358/t, with the price index down 3.5 percent.
Prices decreased across all contract dates, with the strongest decreases being for July contracts, down 5.0 percent.
Gibson said the result reflected buyers having adequate cover, particularly for short term contracts.
"Furthermore, offer volumes leading into this event were up 54 percent on the previous event, which is likely to have translated into a lift in volumes sold, adding further downward pressure on prices."
Milk fat prices were also down.
Anhydrous milkfat (AMF) average prices decreased to US$5,530/t, with the price index down 3.3 percent on the previous event.
Meanwhile, butter average price decreased to US$4,553/t, with the price index down 5.7 percent on the previous event.
AMF prices were driven by a decrease in price across all contract periods traded, particularly August (-4.8 percent).
Butter prices also decreased across all delivery dates, particularly on near term contracts, with July and August price levels down 10 percent and 7.2 percent respectively.
"This is also a reflection of higher offer volumes likely leading to a lift in volumes sold, adding volume driven downward pressure on prices."
Rennet Casein average prices lifted on the previous event to US$7,494/t, with the price index lifting for the fourth time in a row, up 2.3 percent.
Lactose average prices softened, down 2.2 percent to an average price of US$875/t.
Traded volumes were relatively small for both commodities.