WELLINGTON (Reuters) - Global dairy prices slipped for a second straight time at a fortnightly auction held early on Wednesday.
The GDT Price Index dipped 0.7 percent, with an average selling price of $2,980 per tonne.
Prices have fallen at six of the last seven fortnightly auctions as supply from New Zealand, the world's largest dairy exporter, ramps up.
Prices for whole milk powder, the most widely traded item, fell 2.8 percent, compared with derivatives market expectations of a 0.4 percent rise.
Nevertheless, a jump in volumes sold across most products suggested demand was picking up, which could underpin prices going forward.
A total of 38,811 tonnes was sold at the latest auction, an increase of 21.1 percent from the prior one. The auction, by GDT Events, stretched out to more than 2.5 hours, compared to just under two hours at the previous auction.
"There was likely some increased competition," said Amy Castleton, dairy analyst at AgriHQ.
The auction results can affect the New Zealand dollar <NZD=> as the dairy sector generates more than 7 percent of the nation's gross domestic product. However, the kiwi currency was largely unchanged at $0.6554.
GDT Events is owned by New Zealand's Fonterra Co-operative Group Ltd <FCG.NZ>, but operates independently from the dairy giant.
U.S.-listed CRA International Inc <CRAI.O> is the trading manager for the twice-monthly Global Dairy Trade auction.
A number of companies, including Dairy America and Murray Goulburn <MGC.AX>, use the platform to sell milk powder and other dairy products.
The next auction is scheduled for Sept. 18.
(Reporting by Charlotte Greenfield; Editing by Leslie Adler)
