WELLINGTON, July 6 (Reuters) - International dairy prices fell in this month's first Global Dairy Trade auction as demand remains subdued.
The GDT Price Index, which covers a variety of products and contract periods, dipped 0.4 percent, with an average selling price of $2,345 per tonne, in the auction held on Tuesday.
Whole milk powder, which makes up the bulk of the auction, fell 1.6 percent to $2,062 per tonne.
"Global demand for milk powder remains subdued as most buyers have sufficient stocks on hand to meet their immediate requirements, therefore have little urgency to buy right now," said AgriHQ dairy analyst Susan Kilsby.
The slide in prices will disappoint New Zealand farmers, the majority of whom are already operating below break-even.
Until recently, dairy was the backbone of the island nation's economy, representing around 25 percent of exports. But dairy prices have dropped sharply from their record highs in 2013, due to China's economic slowdown and global oversupply.
The Global Dairy Trade auctions are held twice a month, with the next one scheduled for July 19.
The auction platform was set up by Fonterra and is operated by trading manager CRA International.
Participants include Fonterra, Amul, Arla Foods, Arla Foods Ingredients, DairyAmerica, Euroserum and Murray Goulburn. Products traded on the twice-monthly auction include whole milk powder, skim milk powder, butter, cheese, and anhydrous milk fat, among others.
