September 4, 2018 / 10:24 PM / 2 months ago

UPDATE 1-Global dairy prices fall, but volumes sold jumps at fortnightly auction

    * Dairy prices fall 0.7 percent
    * Prices have fallen at six of last seven auctions
    * Volumes growth jumps as competition for product heats up

 (Recasts; adds details, analyst comment)
    By Charlotte Greenfield
    WELLINGTON, Sept 5 (Reuters) - Global dairy prices slipped
for a second straight time at a fortnightly auction held early
on Wednesday.
    The GDT Price Index dipped 0.7 percent, with an average
selling price of $2,980 per tonne.
    Prices have fallen at six of the last seven fortnightly
auctions as supply from New Zealand, the world's largest dairy
exporter, ramps up.
    Prices for whole milk powder, the most widely traded item,
fell 2.8 percent, compared with derivatives market expectations
of a 0.4 percent rise.
    Nevertheless, a jump in volumes sold across most products
suggested demand was picking up, which could underpin prices
going forward.
    A total of 38,811 tonnes was sold at the latest auction, an
increase of 21.1 percent from the prior one. The auction, by GDT
Events, stretched out to more than 2.5 hours, compared to just
under two hours at the previous auction.
    "There was likely some increased competition," 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, the kiwi currency was
largely unchanged at $0.6554.
    GDT Events is owned by New Zealand's Fonterra Co-operative
Group Ltd         , but operates independently from the dairy
giant.
    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. 18.

 (Reporting by Charlotte Greenfield
Editing by Leslie Adler)
  
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