Dairy product prices fall for fifth time in six auctions

Wednesday 7th August 2019

Dairy product prices declined at the Global Dairy Trade auction, sliding for the fifth time in the past six auctions amid an increase of volume on offer.

The GDT price index fell 2.6 percent from the previous auction three weeks ago. The average price was a US$3,253 a tonne, compared with US$3,412 a tonne three weeks ago. Some 34,969 tonnes of product was sold, up from 25,000 tonnes three weeks ago.

“This was in line with NZX Dairy Derivatives market 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,” NZX dairy analysts Robert Gibson and Amy Castleton said in a note.

“This is fairly normal at this time of year as New Zealand milk supplies start to come online,” the analysts added.

Whole milk powder average prices slid 1.7 percent to US$3,039 a tonne.

“With a lift in volumes on offer, there was also a lift in the number of winning bidders at this event with whole milk powder prices down for deliveries for September, November and December,” Gibson and Castleton noted. “Whole milk powder buyers also had adequate cover on near term contracts which was reflected by a lift in August prices.”

At the latest GDT auction, lactose plunged 11.5 percent to US$767 a tonne, while butter milk powder dropped 5.6 percent to US$2,405 a tonne.

Butter slumped 5.5 percent to US$4,165 a tonne, while anhydrous milk fat tumbled 5.1 percent to US$5,246 a tonne.

Cheddar fell 2 percent to US$3,838 a tonne, while skim milk powder slipped 1.6 percent to US$2,482 a tonne, and rennet casein eased 1.3 percent to US$6,885 a tonne.

For sweet whey powder, no product was offered or sold, or no price was published for the last event, or on both of the two previous events.

The New Zealand dollar last traded at 65.29 US cents as of 3.50pm in New York, compared with 65.28 US cents at the previous close in Wellington.

There were 141 winning bidders out of 196 participating at the 12-round auction. The number of registered bidders was 511, down from 512 at the previous auction.

(BusinessDesk)

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