We use two-dimensional numerical simulation to study the interaction between a pair of ferrofluid drops suspended in a rotating uniform magnetic field. Numerical results show four distinct regimes over the range of parameters tested: independent spin, planetary motion, drop locking and direct coalescence. These are in qualitative agreement with experiments, and the transition between them can be understood from the competition between magnetophoretic forces and viscous drag. We further analyse in detail the planetary motion, i.e. the revolution of the drops around each other while each spins in phase with the external magnetic field. For drops, as opposed to solid microspheres, the interaction is dominated by viscous sweeping, a form of hydrodynamic interaction. Magnetic dipole-dipole interaction via mutual induction only plays a secondary role. This insight helps us explain novel features of the planetary revolution of the ferrofluid drops that cannot be explained by a dipole model, including the increase of the angular velocity of planetary motion with the rotational rate of the external field, and the attainment of a limit separation between the drops that is independent of the initial separation.