Milk powder prices eased by up to 6.2% at Fonterra's latest GlobalDairyTrade internet auction held yesterday, the second consecutive monthly decline.
Compared with May, skim milk powder prices fell 6.2% yesterday and whole milk powder by 3.4%, but anhydrous milk fat rose 5.9%.
Fonterra's newly instigated trade weighted index (TWI) fell 3.5%, but was still well above the long-term average price.
The index takes the percentage change in price from GlobalDairyTrade auctions and weights them based on international dairy product trade flows.
Fonterra has consistently warned that dairy prices were volatile, having risen by more than 20% in May's GlobalDairyTrade, but have since had some small corrections.
That volatility was highlighted by the ANZ Commodity Price Index released yesterday, which showed dairy prices rose 4% in May and were now two-thirds higher than a year ago.
The bank's world price index reached its record high in May after a lift of 2.5% to 283.6, its fourteenth consecutive monthly increase.
A year ago, the index was at 177.
Eight commodities, including dairy, rose in price last month, with skins up 12%, kiwifruit 11%, wood pulp 6%, wool 5%, lamb 3%, venison 2% and logs 1%.
Commodities which fell were aluminium 11%, apples 6%, beef 3% and sawn timber 2%.
Seafood was unchanged.
When calculated in New Zealand dollars, the monthly index rose 2.9%, pushing export prices 30% higher in New Zealand-dollar terms in the past year.
During May, exchange rate changes almost balanced each other out, with the NZ dollar strengthening against the euro, pound and Australian dollar, but weakened against the United States dollar and Japanese yen.
