Average prices of dairy products posted their biggest decline since March in Fonterra's latest online auction, adding to signs that commodity prices are easing from record highs as global growth slows.
The GDT-TWI Price Index fell 6.7 per cent to US$4,017 a metric tonne, according to results posted on the globalDairyTrade auction website. That follows a 2.6 per cent gain in the mid-June sale.
See more details of the auction here.
Skim milk powder led the decline for the second sale in a row, falling 7.2 per cent to US$3,704 a tonne. Whole milk powder declined 6.8 per cent to US$3,638 a tonne. In both cases the biggest decline was in the nearest to deliver contract.
Fonterra is downplaying the seriousness of the drop in last night's auction, describing the fall "a blip".
A company spokesman said the 6.7 per cent fall did not necessarily indicate a turning point in the dairy commodity boom that has helped bolster New Zealand's exports in recent months.
"The volumes [were] pretty low - only about 25,000 tonnes," he said. "It's just another indication that the volatility continues ... we're at the bottom end of the season."
The spokesman said volumes would soon begin ramping up, and increased volumes would give a more accurate indication of how supply was meeting demand.
The Thomson Reuters/Jefferies CRB Commodity Index of 19 commodities has declined about 9 per cent from the 2 and a half-year high it reached in late April. Reserve Bank of Australia Governor Glenn Stevens said yesterday that high commodity prices had helped slow the pace of economic growth in the past few months.
At the Fonterra auction, anhydrous milk fat fell by an average 1.4 per cent to US$5,278 a tonne, milk protein concentrate dropped 3.6 per cent to US$6,172 a tonne and rennet casein rose 1 per cent to US$10,161 a tonne.
There were 104 winning bidders from 136 participants over nine rounds. The platform has 347 qualified bidders, up from 342 in the last auction.