Prices of dairy products had their biggest decline since July 2010 in Fonterra's latest GlobalDairyTrade auction, pushing the price index below its 10-year average.
The GDT-TWI Price Index fell 9.9 per cent compared to the last sale two weeks ago. The average winning price dropped to US$2,983 a metric tonne. Prices fell for all six products on offer and across all contracts.
The Real GDT-TWI, which is the GDT-TWI deflated by a measure of the US consumer price index, fell below its 10-year average for the first time since 2009.
See the auction results here.
The decline in prices comes as commodity prices hold near their lowest levels this year, based on the Thomson Reuters/Jefferies CRB Commodity Index of 19 globally traded commodities. The index most recently rose 0.4 per cent to 302.09. Commodity prices have softened on signs demand may slow in China, the world's fastest-growing major economy.
The average winning price for whole milk powder fell 11 per cent to US$2,847 a metric tonne and skim milk powder fell 7.6 per cent to US$2,871 a tonne.
Anhydrous milk fat dropped 6.9 per cent to US$3,304 a tonne. Cheddar fell 12.1 per cent to US$2,937 a tonne and milk protein concentrate declined 3.9 per cent to US$4,520 a tonne. Rennet casein fell 11.9 per cent to US$6,424 a tonne.
There were 118 winning bidders over eight rounds, out of 134 participating bidders. The number of qualified bidders rose to 610 from 603.