Signs New Zealand’s worst drought in 30 years may ease

Whole milk powder fell for the first time this year amid signs that New Zealand’s most widespread drought in at least 30 years may ease, according to Fonterra Cooperative Group Ltd.

Powder for July delivery declined 4.8%, according to a trade-weighted index on the company’s GlobalDairyTrade website. It was the first fall since Dec 18. The near-term contract for New Zealand product fell to $6,001 a metric ton from a record $6,283 on Apr 16. Prices have surged 89% since Jan 2 as a drought declared across the entire North Island including Waikato province, the country’s biggest milk producer, curbed milk collection. The nation may receive near-normal rainfall through June, the National Institute of Water and Atmospheric Research said last month.

Fonterra on Mar 27 raised its forecast pay-out to farmers for the current season citing rising global demand at a time of restrained supply. Milk collection in March fell 16% from a year earlier, the Auckland-based company said.