Wellington, Feb 4 - International dairy prices fell further in the past month, although the pace of the decline slowed signalling the market was near a bottom, New Zealand's Fonterra Cooperative Group Ltd said on Wednesday.
Fonterra, the world's biggest dairy exporter, said the average selling price for whole milk powder (WMP) in an Internet auction that concluded on Wednesday was $1,851 a metric tonne, down 8.2 percent on a month ago.
That compared with a 9.3 percent decline at January's auction and a 14 percent drop seen in December.
"Prices remain under pressure due to weak demand," said Kelvin Wickham, Fonterra's managing director of global trade.
"However supply is slowing, inventories are running down and we believe we are in the trough of the market," Wickham said in a statement.
The auctions offer a one-month contract with delivery starting two months after the auction, and two three-month contracts with three- and six-month delivery dates.
Full details of the auction are available at www.globaldairytrade.info.
On Jan. 28 Fonterra cut its forecast payout to dairy farmers by 15 percent to NZ$5.10 a kilo of milk solids in the 2008/09 season because of falling commodity prices.
The cut is estimated to cost the New Zealand economy about NZ$1 billion ($514 million).
It paid a record NZ$7.90 a kilo in the season just ended, and in May made an initial forecast for the new season of NZ$7 a kg.
Fonterra is owned by around 11,000 farmers and controls about a third of the world's dairy exports. It generates more than 7 percent of New Zealand's gross domestic product and has annual sales of around NZ$17 billion. ($1=NZ$1.95)