World dairy prices climb - first time since Feb
DAIRY product prices rose for the first time since February in the latest GlobalDairyTrade auction, paced by butter milk powder, as buyers found value after the recent slide in prices.
Expanding global milk supply and a drop in buying by Chinese importers as they run down inventories has weighed on dairy prices this year, although lower prices are now starting to entice other buyers back into the market, according to Rabobank's Agribusiness Monthly, released yesterday. Supply won't abate soon though, with figures for New Zealand's 2014 season expected to show record milk production.
The GDT price index advanced 0.9 per cent to US$3,807 a tonne, the first gain after eighth consecutive declines. Some 31,984 tonnes of product was sold, down from 37,012 two weeks ago.
In the latest GDT auction, butter milk powder surged 17 per cent to US$4,535 a tonne, and rennet casein added 4.6 per cent to US$11,155 a tonne. Whole milk powder rose 2.4 per cent to US$3,658, while cheddar gained 2.4 per cent, rising to US$4,381 a tonne.
Butter increased 1.8 per cent to US$3,699 a tonne.
Anhydrous milk fat slid 3.8 per cent to US$3,898 a tonne, while skim milk powder slipped 0.2 per cent to US$3,855 a tonne.
Milk protein concentrate and lactose weren't offered at the event.
ASB Bank rural economist Nathan Penny was not reading too much into the auction result. "I would label it as a tentative sign of a return of stability in prices," he said.
"We would like to get a few more auctions under our belts, with either further rises or at least prices staying at the same level, before we could call it a turn in the market," he said.
The GDT Price Index rose by 0.8 per cent, the first increase following eight consecutive declines, though on notably lower volumes, BNZ said. In the currency market, the reaction to the auction was muted, with the kiwi popping up by 15 points against the US dollar before quickly reversing.
Ahead of the release of the latest GDT data, the New Zealand dollar was trading steady at 86.75 US cents at about 12:30am Auckland time. After the release of the latest GDT data, the kiwi slid as low as 86.43 cents and recently traded at 86.49 cents.
The US dollar advanced against most major currencies after a report showed consumer prices rose faster than expected last month as Federal Reserve policymakers began a regularly scheduled two-day meeting in Washington.
There were 124 winning bidders out of 193 participating bidders at the auction over 15 rounds. The number of qualified bidders was 690, down from 738 two weeks ago.
There were 144 winning bidders out of 195 participating bidders at the auction over 13 rounds. The number of qualified bidders was 738, up from 734 two weeks ago.