Whole milk powder prices surged further on the back of Fonterra’s latest online auction early this morning.
Prices averaged $US3022 a tonne, up 5.7% against last month’s trading event.
This flies in the face of global analyst predictions last month that forecast a drop in the average price which has climbed about 65% since July.
However, continuing upwards movement of the New Zealand dollar against the US will dull the shine of these gains.
During last night’s trade event, prices ranged from $US2825 per tonne to $US3095 per tonne.
Fonterra Global Trade managing director Kelvin Wickham said it was expected prices would need to consolidate after recent sharp rises.
“We’ve seen a rebalancing in the market and we see market fundamental supporting prices around their current levels,” he said.
“In particular there’s been keener demand from customers and a tighter supply situation for most products.”
Mr Wickham said although it was good to see prices firmer there remained a level of uncertainty given many economies were only beginning to recover from the recession.
“With prices at these levels we hope to see reduced subsidies and intervention by overseas governments.”
European Union commodity inventories are expected to hit the market about now, and analysts predict downward price movement as a result.
Prices for New Zealand whole milk powder haven’t been this strong since last October while during their rapid decline from earlier record highs.
This morning, the kiwi dollar was trading at 73.3 US cents.
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