More bad news on the dairy front this morning with a drop of 10.7% in Fonterra’s GlobalDairyTrade price index.
Fonterra’s board will review the forecast milk price next month.
It won’t be going up and could well go down.
The dollar fell to a fresh five-year low in the wake of the GDT result.
The kiwi touched 65.81 US cents, and was trading at 65.92 cents at 8am in Wellington, from 67.05 cents at 5pm yesterday. The trade-weighted index sank to 70.01 from 70.88 yesterday.
The New Zealand dollar dropped sharply after dairy product prices sank an average 10.7 percent to a six-year low in the GDT auction, with the key whole milk powder price dropping 13.1 percent to US$1,848 a tonne. Dairy prices have remained lower for longer amid higher global supplies in New Zealand, Europe and the US, weak demand in China and an import ban in Russia. The weaker prices come as New Zealand production is rising heading into the country’s peak supply period in October, raising concern about the impact on the nation’s economy. . .
We can be grateful we have our own floating currency and aren’t like Greece which is tied to the Euro.