February 6, 2013

Fonterra's latest GlobalDairyTrade (GDT) auction showed an increase in the prices of its dairy products, the first since news emerged last month that small traces of a nitrate inhibitor had been found in some of the company's milk powder.

The GlobalDairyTrade-Trade Weighted Index (GDT-TWI) Price Index rose 2.4% compared to the last sale two weeks ago, the fourth straight gain. The average winning price rose to US$3,598 a tonne. Whole milk powder, the biggest product by volume, rose 5.4% to US$3,468 a tonne.

Fonterra last week posted a statement on the GDT website assuring customers that none of the New Zealand dairy products on offer at this auction had been manufactured during periods when dicyandiamide (DCD) was detected. Ballance Agri-Nutrients and Ravensdown withdrew fertilisers containing DCD voluntarily after the substance was identified.

The total volume of dairy products sold at the latest auction was 38,232 tonnes, down from 40,418 tonnes a fortnight ago. The price of anhydrous milk fat gained 7.2% to US$3,500 a tonne and butter milk powder rose 3.7% to US$3,530 a tonne. Cheddar slipped 0.1% to US$3,525 a tonne.

Lactose traded at US$1,800 a tonne and milk protein concentrate rose 1.2% to US$6,070 a tonne. Rennet casein rose 3.3% to US$8,766 a tonne and skim milk powder climbed 0.5% to US$3,554 a tonne.

There were 135 winning bidders over 13 rounds. There were 212 participating bidders out of a total number of qualified bidders of 762.