Prices for New Zealand's largest export sector, dairy products, face downward pressure, ASB Bank warned on Wednesday. A strong 2000/01 season for dairying, which contributes more than 20 per cent of New Zealand exports, would give way to more mixed pricing messages in coming months, ASB economists said in a market commentary. High demand for NZ cheese due to diseases such as BSE and foot-and-mouth would continue but slowing global growth is negative for prices generally, ASB said. As well, the OECD has predicted higher global supply and there was likely to be increased supply from New Zealand - which contributes around 30 percent of the small international trade in dairy products. "Skim milk prices (hence casein also) face some downward pressure from surplus U.S. stocks that no longer require subsidies to be globally competitive," ASB added. ASB said New Zealand commodity export prices eased last week by 1.6 percent, both in NZ dollar and U.S dollar terms. This was due to lower prices generally - including in dairy products - due to the global economic slowdown, ASB said. "Whether this develops as a trend will be watched closely in the next few weeks - it would appear to be a significant risk." New Zealand's dairy sector has been merged into one company, Fonterra Co-operative Group, bringing together the major processors and export agency the Dairy Board in one company that accounts for around seven per cent of New Zealand GDP.