Dairy product prices declined again at the latest Global Dairy Trade auction, but it's not all bad news says Emma Higgins.

Rabobank's dairy analyst told The Country's Jamie Mackay there were promising signs from the Chinese market.

"I do think there is some shining good news in there," says Higgins who reports last night's auction saw an increase in Chinese buyers looking to procure dairy for products in January.

"That's really important for New Zealand. That's going to help underpin some of those dairy demands and ultimately, moving into 2019, help to improve prices as well."

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The GDT price index fell 1.9 per cent with whole milk powder falling 1.2 per cent, due to the perception of higher milk volumes coming on stream.

"The anticipation is that there's plenty of milk coming out of New Zealand, there's going to be ample product and as a result there's a lack of real buyer urgency to jump into the market."

This is not the case worldwide says Higgins, with drought decreasing milk volume and increasing fat prices.

"Offshore what we're seeing in Europe ... is the continued elevation of fat prices [because] stocks are really short over in Europe ... thanks to adverse weather and as a result we're seeing those elevated prices."

Also in today's interview: Emma Higgins goes over Rabobank's latest Dairy Quarterly Report.