Global dairy prices and volumes dropped for a second time in a row at an auction on Thursday, as prices fell across almost all products.
The Global Dairy Trade (GDT) Price Index dipped 2.9%, with an average selling price of $3,176 per tonne, continuing from a 4.7% drop at the previous sale earlier in Feb, according to GDT Events.
Whole milk powder prices were down 2.6% to their lowest in 12 months and skim milk powder prices also dropped 2.6%.
Milkfats were down, with anhydrous milk fat down 5.5% and butter slipping 3.9%.
“While AMF prices continue their downward trend, butter prices have been relatively stable near or above the US$4000/t mark since mid-2019,” said aid Robert Gibson, analyst at NZX.
A total of 28,181 tonnes was sold at the latest auction, falling 2.8% from the previous one, the auction platform said on its website.
Analysts say the prices could see further downward pressure due to the impact on exports from the spread of the coronavirus in China.
The auction results can affect the New Zealand dollar as the dairy sector generates more than 7% of the nation’s gross domestic product.
The dairy prices, however, took a back seat as concerns over the spread of coronavirus in China has weighed on Asian currencies, with the kiwi currency already down 0.7% at $0.6386 on Thursday.
The New Zealand milk co-operative, which is 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 giant.
U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction. (Reporting by Praveen Menon Editing by Chizu Nomiyama)