World prices for dairy products fell twelve-and-a-half minimum, as large buyers, including China, has not appeared on the market, increasing the risk that any price recovery will be minimal and will take more time than expected, as demand remains weak.

The global price index for dairy products (GDT) fell by 10.6%, the auctions are held every two weeks by the new Zealand dairy exporter Fonterra products, which is the biggest drop in a year and at least December 2002.

The new Zealand dollar fell to a five-year low in 0,6583$ after receiving the results. The decline in the index by 61% after reaching a record high in 2013 is considered a broader threat to the country's economy, which is the largest world exporter.

Market participants now have a much more vague idea of the price recovery, analysts said AgriHQ.

Farmers in New Zealand are now faced with extremely low milk prices two seasons in a row. Most farmers unable to farm break-even at such a low price for milk.

Decrease volatile world prices for dairy products increased the risk that Fonterra will be forced to reduce its forecast prices for producers in the current season with a 5.25 NZ$ (3,46$) per kg of dry milk residue, which are already below production costs for many farmers.

New Zealand dairy cooperative, which is owned by some 10,500 farmers, controls almost one third of world trade in dairy products.

Average prices of all products sold at the latest auction, including milk powder, butter and cheese fell by 10.7% to 2,082 USD per ton, the lowest level since July 2009, the biggest decrease showed whole milk powder and cheddar, as the number of bidders continued to fall.

The average price for whole milk powder, which is included with most products, the auction fell to a six-year low of 1 848$ per tonne, which is 65% below the record high reached in October 2013.

Analysts said that they expect a possible further fall in prices in the near future, as the proposal will increase in the coming months.

World prices for dairy products fell last year, as slowing growth in China, the middle East and in some developing countries has lowered the demand for protein in growing the middle class, while Russian sanctions and high milk production has increased global supply.