Prices of dairy products extended their slide in Fonterra Cooperative Group’s latest GlobalDairyTrade auction, reaching the lowest since August 2009.
The GDT-TWI Price Index fell 2.4 percent compared to the last sale two weeks ago.
The average winning price dropped to US$2,843 a metric tonne.
The price of whole milk powder declined 2.2 percent to US$2,776 a tonne and skim milk powder fell 4.6 percent to US$2,730 a tonne.
The decline comes as Fonterra’s farm gate pricing faces political scrutiny in New Zealand, where the cooperative’s enabling legislation is getting its biggest overhaul since the world’s biggest dairy exporter was created in 2001.
Among changes are greater regulatory oversight of prices and the promotion of Fonterra’s Trading Among Farmers scheme that seeks to solidify its capital base.
Anhydrous milk fat dropped 13.6 percent to US$2,852 a tonne in the latest auction. Cheddar gained 3.1 percent to US$2,940 a tonne and milk protein concentrate declined 11.7 percent to US$3,990 a tonne. Rennet casein fell 0.5 percent to US$6,395 a tonne.
Lactose, which is sold by Australian dairy company Murray Goulburn, rose 3 percent to US$2,016 a tonne.
There were 119 winning bidders over 11 rounds, out of 136 participating bidders. The number of qualified bidders rose to 620 from 610.
(BusinessDesk)
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5 Comments
The ANZ Commodity Price Index fell sharply in April, down 4.5 percent from a month earlier to sit at an 18-month low. This represents the largest monthly percentage decrease in the index since February 2009. Twelve commodity prices weakened in April, three were unchanged and two increased.
The price of sheepmeat recorded the largest decrease in April, falling 12 percent from a month earlier, to an 18-month low. Wool prices fell 9 percent in the month, dropping to a 16-month low. Dairy and aluminium prices fell 6 percent in April, beef prices slipped 2 percent, log prices eased 1 percent and kiwifruit and seafood prices retraced half a percent. All the components in the dairy sub-total eased in April, led by a 7 percent fall in cheese. Milk powder prices dropped 6 percent, butter prices decreased 5 percent and casein prices eased 1 percent. In aggregate, international dairy prices have retraced back to the level that prevailed in August 2010.
The only commodities to record a price increase in April were wood pulp and pelts, lifting 4 and 5 percent respectively. Apple, venison and sawn timber prices were unchanged on a month earlier.
All in all the Banks will be twitching.
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