December 5, 2017 / 8:59 PM / 11 days ago

UPDATE 1-Global dairy prices edge higher at auction, bucking recent trend

 (Adds details)
    WELLINGTON, Dec 6 (Reuters) - Global dairy prices edged
higher on Wednesday as volumes fell, bucking a recent trend of
declining prices.
    The GDT Price Index rose 0.4 percent, with an average
selling price of $3,091 per tonne, in the fortnightly auction
held in the early hours of the morning.
    The index rose after falling for four consecutive auctions,
underpinned by higher whole milk and skim milk powder.
    Prices had risen in the second quarter on strong global
demand and as production eased, but have since had a bumpy ride
as supply has picked up.
    "Auction volumes were down ... so in this context a lift was
expected and actually quite modest," ASB said in a research
note.
    It said it was sticking to its 2017/18 milk price forecast
of $6.50 per kg and expected prices to consolidate in coming
auctions. 
    "Short-term price risks are largely evenly balanced, with
dry (New Zealand) weather on one hand and improving global
production on the other."
    Prices of whole milk powder, the most widely traded product,
rose 1.7 percent and skim milk powder rose 4.7 percent. But
butter slumped 11.1 percent. 
    A total of 29,514 tonnes was sold at the latest auction,
falling 15.8 percent from the previous one, the auction platform
said on its website.
    The auction results can affect the New Zealand dollar       
as the dairy sector generates more than 7 percent of the
nation's gross domestic product. The New Zealand dollar         
last traded 0.2 percent higher at $0.6875 to the U.S. dollar.
    GDT Events is owned by New Zealand's Fonterra Co-operative
Group Ltd         , but operates independently from the dairy
giant.
    U.S.-listed CRA International Inc          is the trading
manager for the twice-monthly Global Dairy Trade auction.

 (Reporting by Ana Nicolaci da Costa; Editing by Edmund Blair)
  

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