Fonterra milk powder price increase for second month

Milk powder for June delivery rose 0.9 percent from the May price set in February. The price rose for a second month and is the highest since November.

World prices of dairy products fell from record highs 14 months ago as the slowing global economy curbed commodities demand and the US and the EU increased dairy exports.

In February, Fonterra said prices may be close to a trough in the market after they plunged 58 percent since the company began the monthly sales in July.

The stronger prices are encouraging and indicate that supply and demand are gradually getting balanced, said Kelvin Wickham, managing director of global trade.

Fonterra's Internet-based auctions offer a one-month contract with delivery starting two months after the sale, and two three-month contracts with delivery starting three and six months later.

In Wednesday's (Apr 1) sales, powder for June delivery rose to an average US$2,133 per tonne from US$2,115 for May shipment in last month's auction.

Powder for delivery July through September rose 4.8 percent to US$2,322 per tonne, Fonterra said.

Powder for shipment October through December rose 4.6 percent to US$2,254 per tonne, and average prices across all contracts rose 3.5 percent.