WELLINGTON (Reuters) - Global dairy prices slipped for the first time in three months in an auction held early on Wednesday as demand for milk fat products waned.
The GDT Price Index dipped 0.5%, with an average selling price of $3,467 per tonne, at the fortnightly auction, having risen 1.7% at the previous sale after climbing since September.
"The decrease was driven by reduced demand for milk fats which offset strong prices continuing for milk powders," said Robert Gibson, dairy analyst at NZX.
Anhydrous milk fat prices sank 5.1% while butter prices fell 4.9%.
Whole milk powder - the top traded item - was largely flat, edging up 0.1% and skim milk powder jumped 1.9%.
A total of 36,258 tonnes was sold at the latest auction, falling 4.5 percent from the previous one, the auction platform said on its website.
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 results took a backseat to a weaker U.S. dollar, sparking a rally in the kiwi to a four-month high of $0.6533.
GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd <FCG.NZ>, but operates independently from the dairy giant.
The New Zealand milk co-operative, which is owned by about 10,500 farmers, controls nearly a third of the world dairy trade.
U.S.-listed CRA International Inc <CRAI.O> is the trading manager for the twice-monthly Global Dairy Trade auction.
The auctions are held twice a month, with the next one scheduled for December 17.
(Reporting by Charlotte Greenfield; Editing by Tom Brown)
