October 2, 2018 / 9:38 PM / 2 months ago

UPDATE 1-Global dairy prices fall for fourth auction in a row on boosted supply

    * Dairy prices dip 1.9 pct
    * Increased supply putting pressure on prices
    * Demand remains strong, especially from Asia - analyst

 (Recasts; adds analyst quote, market reaction)
    By Charlotte Greenfield
    WELLINGTON, Oct 3 (Reuters) - Global dairy prices fell for
the fourth time in a row at an auction held early on Wednesday
as ramped-up supply outpaced robust demand.
    The GDT Price Index dipped 1.9 percent, with an average
selling price of $2,901 per tonne at the fortnightly auction.
The index had fallen 1.3 percent at the previous sale. 
    Prices for the most widely traded item, whole milk powder
(WMP), fell 1.2 percent, much further than futures market
expectations of a roughly 0.4 percent drop. 
    A strong recovery in production out of New Zealand, the
world's largest dairy exporter, was pushing down prices even as
demand, particularly from Asia, climbed.
    "Demand for WMP was high ... North Asia (which includes
China) bought more than half of the WMP that was sold," said Amy
Castleton, dairy analyst at NZX.
    "China is likely to be buying product to ship in December at
this time so that it lands during the period in which a lower
tariff rate applies, from 1 January 2019."
    Overall, a total of 41,981 tonnes was sold at the latest
auction, an increase of 7.3 percent from the previous one, the
auction platform said on its website. 
    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.
    The kiwi currency fell from around $0.6608 to $0.6590 in the
hours after the auction.
    GDT Events is owned by New Zealand’s Fonterra Co-operative
Group Ltd         , but operates independently from the major
dairy company.
    The New Zealand milk co-operative, which is owned by about
10,500 farmers, controls nearly a third of the world dairy
trade.
    U.S.-listed CRA International Inc          is the trading
manager for the 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 Oct. 16.

 (Reporting by Charlotte Greenfield
Editing by James Dalgleish)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below