6 Aug 2013

All eyes on overnight global dairy auction

8:17 pm on 6 August 2013

Fonterra's fortnightly global dairy auction overnight on Tuesday will provide the first indication of any impact of the contamination scare on milk prices.

At the last auction in mid-July, international milk prices rose for a third consecutive time and are 79% higher than they were a year ago.

ANZ senior economist Sharon Zollner said the auction could wipe some of the premium off New Zealand diary products but it was too soon to say how long it would last.

"The real key to watch overnight will be the longer-dated products, because that will give a sense of whether those people in the market are expecting the impacts of this to go on for a long time or whether they're expecting it to blow over fairly quickly," Ms Zollner said.