May 13, 2009
Fonterra milk powder prices rise to six-month high
Dairy giant Fonterra said near-term whole milk powder prices rose to a six-month high at auction.
Milk powder for July delivery rose 1.6 percent from the June price set last month, according to Fonterra. It was the third straight gain, though prices for later deliveries fell.
The auction confirms Fonterra's expectation that dairy markets will face further uncertainty in the future, and prices are expected to continue cycle around current levels, said Nigel Kuzemko, portfolio optimisation director at Fonterra's global trade unit.
World prices of butter, milk and cheese fell from record highs 18 months ago, as the slowing global economy limited demand for commodities and the US and the EU increased dairy exports.
The later deliveries coincide with peak production in New Zealand and Australia, but the lower prices are more likely a reflection of weak demand, Kuzemko said.
Powder for July delivery rose to an average US$2,168 per tonne, the highest since November. Powder for delivery August to October fell 6.9 percent to US$2,162 tonne, a three-month low. Powder for delivery November to January decreased 6.3 percent to a three-month low of US$2,113 per tonne.
Average prices across all contracts fell 4.1 percent.
