International dairy markets continue to suffer from low prices despite the rate of decline slowing compared with the last quarter, according to Rabobank's latest Dairy Quarterly report.

Rabobank report exceptional milk production growth in export regions in the last nine months, which has outstripped weak local consumption, boosting supply in the international market and forcing prices to fall. Despite this, low prices have cleared huge volumes and trade growth is up 15% year on year.

Rabobank analyst Tim Hunt said: "Low prices were required to help clear a market still dealing with exceptionally strong supply growth, a rising US dollar, a weak economic environment and reduced buying from China and Russia."

China continued to buy less from the international market than this time last year, with incoming shipments down almost 50% in October year on year. Meanwhile, Russia's enforced ban on imports has caused global prices to fall by 30-50% from their peak.

Rabobank report that the challenge of avoiding stock accumulation will become greater in coming months, with much depending on how quickly the world's dairy suppliers respond to recent price cuts.

Rabobank expects the market to gradually tighten in 2015. However, it may take a weak southern hemisphere production peak in 2015 to finally tip the balance for a price recovery to gain momentum.