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Dairy prices slip further at NZ Fonterra auction
WELLINGTON May 16 (Reuters) - International milk prices fell to their lowest level in two-and-a-half years in the latest global auction, New Zealand's Fonterra Cooperative Group, the world's biggest dairy exporter, said on Wednesday.
Fonterra's Global Dairy Trade-Trade Weighted Index, which covers a range of 30 products and contract periods on offer, dropped 6.4 percent, with an average selling price of $2,618 per tonne.
It was the third consecutive fall in the index at the fortnightly auctions. So far this year there have been only two rises out of the 10 auctions.
Prices fell for most dairy products on offer, with the largest decline seen in anhydrous milk fat, which fell 11.9 percent. Skim and milk powder also posted hefty falls, while rennet casein was the only one of the main products to manage a lift.
The index, which hit a near four-year peak in March last year, has fallen 33 percent over the past year, and was at its lowest level since August 2009.
Full details of the auction are at: www.globaldairytrade.info
Fonterra holds two auctions a month, with the next one is on June 5.
The co-operative has forecast a payout for the 2011/12 season of between NZ$6.75-NZ$6.85 a kg of milk solids, but the analysts have suggested the final figure may be lower.
The payout for the 2010/11 season was a record NZ$8.25 a kilo on record production and sales.
Fonterra is owned by about 10,500 farmers and controls around a third of the world's dairy exports, generating more than 7 percent of New Zealand's gross domestic product.
Dairy produce makes up more than a quarter of New Zealand's NZ$48 billion annual export earnings, and the currency is often sensitive to movements in prices. (Reporting by Gyles Beckford)
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