New Zealand dairy prices post sharpest decline in over 10 months, weaker than market consensus

Global dairy prices in New Zealand posted their sharpest decline in over 10 months at the latest GlobalDairyTrade (GDT) price auction held Tuesday. Also, it remained weaker than what markets had initially anticipated.

Overall prices in the latest GDT auction fell 3.9 percent, following a 0.5 percent decline in the final auction of 2016. There was also a sharp 7.7 percent decline in Whole Milk Powder prices in the latest auction to USD3,294 per tonne.

On Wednesday morning's (NZT) auction, lactose fell 2.9 percent to USDUS836 a tonne, while rennet casein declined 2.7 percent to USDUS6234 a tonne. Anhydrous milk fat slipped 0.6 percent to USDUS5352 a tonne.

However, prices of butter rose 0.5 percent to USDUS4308 a tonne, while cheddar added 1.4 percent to USDUS3894 a tonne. Skim milk powder gained 2.3 percent USDUS2660 a tonne, while butter milk powder increased 4.5 percent to USDUS2670 a tonne.

Evidence suggests production within the EU will remain weak, especially as capacity was reduced sharply late in the year. The EU Commission has also pledged to restrict the sale of intervention stocks, which should underpin prices, reports said.

Meanwhile, the NZD/USD traded at 0.69, down -0.09 percent, while at 5:00GMT, the FxWirePro's Hourly NZD Strength Index remained neutral at 14.38 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex