Jan 18 International dairy prices edged up slightly at an auction held early on Wednesday, reinforcing an ongoing recovery that had been dented by two consecutive fortnights of losses.
Average prices climbed 0.6 percent at the Global Dairy Trade auction, which takes place twice a month, with an average selling price of $3,517 per tonne.
The relatively flat result reflected balancing supply and demand after tighter supply in New Zealand and Europe pushed up prices last year.
“At present there is neither a shortage of dairy products or an excess of product available,” Amy Van Ossenbruggen, dairy analyst at AgriHQ, said.
“This situation is likely to persist for the next few months during which time prices will most likely bob up and down from week to week,” she added.
Farmers and analysts had been nervous that a 50 percent rebound in prices during 2016 after two years of falls was stalling.
A total of 22,030 tonnes was sold at the latest auction, falling 1.6 percent from the previous one, Global Dairy Trade said.
Global Dairy Trade is owned by New Zealand co-operative Fonterra, but operates independently from the dairy giant. A number of companies, including Dairy America and Murray Goulburn, use the platform to sell milk powder and other dairy products.
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 Kiwi soared 1.4 percent to a one-month high of $0.7203. Much of that was on U.S. dollar weakness, but analysts said rising dairy prices also contributed to the rally.
Source: Reuters
