According to Fonterra Cooperative Group Limited, the world’s largest dairy exporter has reported that the prices of powder milk may decrease. The delivery for the month of September of powder milk has decreased by 7.4%. These figures were revealed by a trade-weighted price index, which was calculated by the company after its latest Global Dairy Trade auction. In addition, the average price was $3,666 a metric ton, which was the recorded the lowest since the auction, which held on January 5.

In May, Auckland-based Fonterra have forecast that they would pay the farmers 10% less this year for their milk as the global prices are decreasing. The prices have fallen by 26%.

In early March, it was observed that there would be expectations of huge supply from New Zealand and more northern hemisphere milk products are entering the market. In the auction of other products, Fonterra have told that the prices of skim milk powder dropped by 16% and there were declines for milk fat and milk protein concentrate.

"The overnight Fonterra auction was enough to knock the New Zealand dollar lower in very early morning trading. It opens this morning in familiar territory but looking like fresh highs could be out of the question today”, says Alex Sinton, a senior dealer at ANZ New Zealand.