Dairy

Global dairy prices slump due to bigger supply

4 July 2018

Financial review
4 July 2018

Global dairy prices fell at the biggest pace this year at a fortnightly auction held early on Wednesday, as strong supply muted what buyers were willing to pay for key products.

The GDT Price Index dropped 5 per cent, with an average selling price of $US3,232 per tonne, in the auction held in the early hours of the morning, after slipping 1.2 per cent at the previous sale.

The results came after New Zealand milk producer Fonterra said on Tuesday its total milk production in the country increased 6 per cent in May due to favourable autumn weather conditions. Fonterra’s announcement “appears to have given the market the jitters,” said Amy Castleton, analyst at AgriHQ.

Whole milk powder, the most widely traded product, fell 7.3 per cent to $US2,905 per tonne. A total of 26,519 tonnes was sold at the latest auction, an increase of 22.6 per cent from the previous one, the auction platform said on its website.

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