Global dairy prices rose for the second time in a row at an auction held early on Wednesday, suggesting a recovery was back on track.
The Global Dairy Trade Price Index climbed 0.9 percent, with an average selling price of $3,368 per tonne, at a fortnightly auction held in the early hours of the morning.
The index rose 0.3 pct at the previous sale. That suggests a return to the strong three-month rally that
hit some dips in July and August.Bad weather in New Zealand, the world’s largest dairy
Bad weather in New Zealand, the world’s largest dairy exporter, had hampered supply and would likely push prices even higher in coming months, according to analysts. “Stepping back from the auction result, we see potential for
“Stepping back from the auction result, we see potential for overall prices, particularly for WMP (whole milk powder), to break this holding pattern and push higher over coming months,” said ASB economists in a research note.
Whole milk powder rose 0.6 percent, slightly ahead of expectations from futures markets, according to analysts.
Butter performed especially well on strong global demand, rising 1.2 percent to hit a new record of $6,026.
A total of 34,117 tonnes was sold at the latest auction, an increase of 1.8 percent from the previous one, the auction platform said on its website.The New Zealand dollar rose to $0.7313 from around
The New Zealand dollar rose to $0.7313 from around $0.7296 before the auction.
The auction results can affect the currency as the dairy sector generates more than 7 percent of the nation’s gross domestic product.
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.
The auctions are held twice a month, with the next one scheduled for Oct. 3.
Source: Reuters
