Fonterra price fall doesn’t augur well for dairy markets

A second consecutive Fonterra auction price fall in a month indicates the strength of global dairy product markets may be waning.

Fonterra controls nearly a third of the world dairy trade, and its global dairy trade index fell 1.8% in the auction on Tuesday, following a 1.9% fall in the previous sale.

For months, international prices per tonne of milk powder have hovered around $5,000, at levels 40%-60% higher compared to a year ago.