Despite indications of stability within sales on Fonterra's online auction platform, the dairy giant believes there is still uncertainty with milk prices over the next few months.Fonterra's globalDairyTrade concluded its March trading event early this mor
Despite indications of stability within sales on Fonterra’s online auction platform, the dairy giant believes there is still uncertainty with milk prices over the next few months.
Fonterra’s globalDairyTrade concluded its March trading event early this morning, which saw a small increase to the average price for whole milk powder (WMP) – up 0.8% to $US3281 per tonne.
Prices for WMP ranged from $US3180 to $US3395 per tonne.
Today was the first attempt at moving skim milk powder (SMP) on the platform.
The average price for SMP was $US2927, above recent Oceania spot prices.
GlobalDairyTrade manager Paul Grave said the event produced a pleasing result that reflected a relatively stable market over the last four weeks.
“There is still an element of uncertainty as to how supply and demand factors will influence prices over the coming months,” he said.
“Buyers are focused on ensuring their short to medium term supply requirements have been secured.”
A number of factors will be influencing global dairy prices over the next few months.
Mr Graves said the New Zealand dairy season is coming to an and production in Australia is down.
Meanwhile European supply was starting to come on stream. He said a weakening of the euro against the US dollar made European farmers’ production more competitive.
“The long term outlook is still positive. Demand is strengthening on the back of the global economic recovery.”
Also sold on the platform, anhydrous milk fat (AMF) received an average price of $US3959 per tonne, down 5.4% on the February trading event.
With the addition of SMP to the platform, globalDairyTrade is handling about 20% of Fonterra’s sales.
