* Global dairy prices jump 6.7 pct
* Fifth time in a row prices have risen, reversing earlier slump
* Whole milk powder leads gains (Recasts, adds market reaction, analyst comment)
WELLINGTON, Feb 7 (Reuters) - Global dairy prices surged at an auction held early on Thursday, led by gains for key product whole milk powder.
The GDT Price Index climbed 6.7 percent, with an average selling price of $3,265 per tonne at the fortnightly auction.
It was the fifth sale at which the prices had risen and recovered from months of falls at the end of 2018 sparked by strong supply from the world’s biggest dairy exporter, New Zealand.
At the latest event prices for the most widely traded item, whole milk powder, climbed 8.4 percent, smashing futures markets’ expectations of a 2 percent gain.
“Firm demand from Asian countries is likely to have helped to support prices,” said Robert Gibson, dairy analyst at NZX.
A total of 23,326 tonnes was sold at the latest auction, falling 16.4 percent in volume 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.
However, the kiwi was down 0.8 percent at 68.31 U.S. cents on Thursday morning, following its Australian neighbour downwards as the Antipodean currencies were hit by a stronger U.S. dollar.
GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd, but operates independently from the dairy giant.
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 twice monthly Global Dairy Trade auction.
A number of companies, including DairyAmerica and Murray Goulburn, use the platform to sell milk powder and other dairy products.
The auctions are held twice a month. The next one is scheduled for Feb. 19. (Reporting by Charlotte Greenfield; editing by Jonathan Oatis)