August 21, 2018 / 10:31 PM / 4 months ago

UPDATE 1-Global dairy prices fall 3.6 pct, as supply for butter ramps up

    * Global dairy prices dip 3.6 pct
    * Butter prices and whole milk powder lead losses
    * Falls due to higher supply outlook - analyst

 (Recasts; adds analyst comment and market reaction)
    By Charlotte Greenfield
    WELLINGTON, Aug 22 (Reuters) - Global dairy prices sank to a
nine-month low at a fortnightly auction held on Wednesday as
butter prices plummeted.
    The GDT Price Index dipped 3.6 percent, with an average
selling price of $3,044 per tonne at the sale held in the early
hours of the morning.
    The index remained unchanged at the previous sale, after
four consecutive falls.
    Price drops were broad-based, but led by butter, which fell
8.5 percent as supply from New Zealand ramped up.
    Whole milk powder (WMP), the most widely traded product,
dropped 2.1 percent, missing expectations of a 1 percent lift
from the derivatives markets. 
    "Buyers will be feeling that WMP will be amply available in
the coming months, due to an anticipated lift in NZ milk
production this season, along with already positive results for
June and July milk supplies," said Amy Castleton, dairy analyst
at AgriHQ.
    The auction results can affect the New Zealand dollar
         as the dairy sector generates more than 7 percent of
the nation's gross domestic product.
    However, a dip in the U.S. dollar fueled a rally in the kiwi
currency in spite of the auction results, rising to $0.6696
overnight from $0.6637 the previous day.
    A total of 32,041 tonnes was sold at the latest auction,
falling 6 percent from the previous one, the auction platform
said on its website.
    The New Zealand milk co-operative, owned by about 10,500
farmers, controls nearly a third of the world dairy trade.
    GDT Events is owned by New Zealand's Fonterra Co-operative
Group Ltd         , but operates independently from the dairy
producer.
    U.S.-listed CRA International Inc          is the trading
manager for the twice-monthly Global Dairy Trade auction. A
number of companies, including Dairy America and Murray Goulburn
        , use the platform to sell milk powder and other dairy
products.
    The next auction is scheduled for Sept. 4.

 (Reporting by Charlotte Greenfield; Editing by Richard Chang)
  
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