July 20, 2011


Global dairy prices hit record low



In Fonterra's latest online auction, average prices of dairy products fell to their lowest level since early December, adding to evidence the steam in coming out of global commodity prices.


The GDT-TWI Price Index fell 5.1% to US$3,796/tonne, according to results posted on the globalDairyTrade auction website. That follows a 6.7% decline in the last sale two weeks ago.


Prices fell for a third straight sale though they're still well above the 10-year average for the Real GDT-TWI. Global commodity prices have eased amid signs economic growth isn't as sturdy as expected. The Thomson Reuters/Jefferies CRB Commodity Index of 19 commodities has declined about 7% from the 2.5-year high it reached in late April.


Skim milk powder fell 5.2% to US$3,488/tonne and whole milk powder dropped 4% to US$3,475/tonne. Anhydrous milk fat fell by an average 12.5% to US$4,614/tonne, milk protein concentrate dropped 10.2% to US$5,525/tonne and rennet casein fell 1.4% to US$9,992/tonne.


Butter milk powder, which has not traded in recent auctions, rose 0.3% to US$3,345/tonne.


There were 97 winning bidders from 122 participants over eight rounds. The platform has 348 qualified bidders, up from 347 in the last auction.

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