International milk prices rose again on Wednesday, marking a two-month winning streak at the Global Dairy Trade auction after falling throughout most of last year.
The GDT Price Index climbed 4.2 percent, with an average selling price of $3,057 per tonne, in the auction held on Tuesday by GDT Events.
The index rose 2.8 pct at the previous sale, and has now gained for four consecutive auctions, after declining for months last year as higher-than-expected supply in New Zealand, the world’s biggest dairy exporter, dampened prices.
Volumes tightened at the latest auction with a total of 27,909 tonnes sold, falling 2.6 percent from the previous one, the auction platform said on its website(www.globaldairytrade.info).
Prices for skim milk powder jumped 10.3 percent, while prices for whole milk powder, the most widely traded item, gained 3 percent.
The auction results can affect the New Zealand dollar as the dairy sector generates more than 7 percent of the nation’s gross domestic product. The currency advanced slightly overnight on the outcome of the dairy auction but declined later on concerns over Brexit to a two-week low of $0.6815.
The auctions are held twice a month, with the next one scheduled for February 6.
The New Zealand milk co-operative, which is owned by about 10,500 farmers, controls nearly a third of the world dairy trade.
GDT Events is owned by New Zealand’s Fonterra Co-operative Group Ltd, but operates independently from the dairy giant.
U.S.-listed CRA International Inc is the trading manager for the twice-monthly Global Dairy Trade auction.
A number of companies, including Dairy America and Murray Goulburn, use the platform to sell milk powder and other dairy products.
Source: reuters.com
