Slight drop in global dairy auction prices
A slight drop in prices at last night's global dairy auction following two consecutive gains was not enough to pull down the New Zealand dollar against its Australian counterpart today.
The GlobalDairyTrade's trade-weighted price index overnight fell 0.8 per cent compared with the last sale three weeks ago.
The average winning price was down to US$4943 (NZ$5964) a tonne from US$4990 (NZ$6048) a tonne.
Maximum supply, the measure of how much product is for sale, dropped to 46,956 tonnes from 48,338 tonnes, with a total of 46,418 tonnes sold.
The slight price drop followed two consecutive gains in the dairy commodity price index, and prices were still about 50 per cent higher than a year ago.
In the latest auction three of the nine product categories rose.
Skim milk powder led the decliners, dropping 3.4 per cent.
Whole milk powder, the biggest category by volume, declined 0.6 per cent.
Butter, lactose and milk protein concentrate each posted gains of more than 5 per cent.
In last night's auction 208 bidders took part, with 152 winning bidders, and 828 qualified to bid.
Westpac market strategist Imre Speizer said the New Zealand dollar had gained against the Australian dollar despite the slight drop in the dairy price.
The kiwi was trading at A92.82c this morning from A92.50c at 5pm yesterday.
Speizer said the gain was a continuation of the theme that Reserve bank of New Zealand was likely to raise interest rates from 2.5 per cent this year, while Australia's central bank was expected to hold or cut rates from 2.5 per cent.
American company Land O'Lakes would begin offering skim milk powder on the online auction from March 4, and said it also planned to offer butter via the platform later in 2014.
GlobalDairyTrade is owned by Fonterra, with Fonterra products representing 89 per cent of the product sold in the fortnightly auction.
United States, Australian, Indian, European and Scandinavian dairy companies also sell their products on the independent platform.