Global dairy commodity prices have dropped at the latest Global Dairy Trade (GDT) auction, with analysts saying the decrease was in line with market expectations.
The global dairy commodity price index decreased 2.6 percent with average prices reaching US$3253/t.
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NZX Dairy Analyst, Robert Gibson said the drop was in line with expectations leading into the event, and was likely linked to a lift in the volume of product sold, which was up nearly 40 percent on the previous event.
"This is fairly normal at this time of year as NZ milk supplies start to come online," he said.
Milk powder prices eased, with Whole Milk Powder (WMP) prices down 1.7 percent, and Skim Milk Powder (SMP) down 1.6 percent on the previous year.
"With a lift in volumes on offer, there was also a lift in the number of winning bidders at this event with WMP prices down for deliveries for September, November and December," said Gibson.
He said WMP buyers also had adequate cover on near term contracts which was reflected by a lift in August prices.
Milkfat prices also eased in the auction.
The anhydrous milk fat (AMF) price index was down 5.1 percent to an average price of US$5246/t, with milkfat prices decreasing for all delivery dates.
Butter prices eased, down 5.5 percent with an average price of US$4165/t.
"Similar to milk powders, this was also likely driven by a lift in volumes sold for both commodities."
Although prices have eased at this event, the average price continued to remain comfortably above US$3000/t which continued the trend of price levels since the beginning of the year.
"This largest lift in volumes sold overall was due to increased demand from North Asia, with volumes sold to all other regions also increasing on the previous event."