Fonterra milk prices slump 5.9pc
Prices at Fonterra's latest online dairy auction slumped overnight following recent gains, with rising macroeconomic uncertainty sapping demand for commodities.
The GDT-TWI Price Index fell 5.9 per cent compared with the last sale, with an average winning price of US$2787 (NZ$3460) per metric tonne.
''Following encouraging signs from the previous two auctions, we felt this one could have gone either way,'' said Mike Jones, a market strategist at Bank of New Zealand.
''It's still early days in the dairy season, but this bodes ill for payout calculations and may limit some of the recent New Zealand dollar enthusiasm.''
The prices Fonterra gets at the online dairy auctions determine the payout it passes on to farmers. That, in turn, is closely watched as a lead into the rural economy, a sector that has remained largely subdued since the global financial crisis.
All eight product categories saw prices declines, led by a 10.4 per cent drop in anhydrous milk fat, a 9.8 per cent fall in skim milk powder, and a 4.5 per cent slip in rennet casein.
The sales saw 168 participants out of 681 qualified bidders take part, with 132 winning bids.
- © Fairfax NZ News
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