February 5, 2014

International dairy prices were reported at a slightly higher level according to an overnight GlobalDairyTrade (GDT) internet-based auction for February 4, 2014.

As the GDT Price Index is widely considered a market reference price for dairy products, the GDT auction is closely watched. Products on offer include whole milk powder, skim milk powder, butter, cheese and anhydrous milk fat. A solid result tends to support the New Zealand dollar as dairy forms the backbone of the economy, representing around 25% of exports.

Participants in the auction include Fonterra, which produces about a third of the world's traded dairy products, Europe-based Arla Foods, Murray Goulburn Co-Operative of Australia and US-based DairyAmerica Inc., as well as India's Amul and Euroserum, a unit of Sodiaal International.

The result is "encouraging, especially because Fonterra had increased the volume of product on offer at this week's auction and further out," ANZ Bank said.