Global dairy price bounce could prove to be temporary as NZ supply ramps up
- Dairy prices rise 2.2 pct at fortnightly auction
- First rise since May
Global dairy prices rose for the first time in six months at a fortnightly auction held early on Wednesday as lower volumes of key products were offered at the sale.
The GDT Price Index climbed 2.2pc, the first rise since May, to an average selling price of $2,819 per tonne.
The index had fallen 3.5pc at the previous sale.
Prices have been falling on ramped up supply from New Zealand, the world’s top dairy exporter, but lower volumes offered by dairy giant Fonterra had supported prices at the latest auction, according to analysts.
Prices for whole milk powder, the most heavily traded item, rose 2.5pc.
A total of 36,450 tonnes was sold falling 15.2pc from the previous one, the auction platform said on its website.
The price rally could prove to be temporary as New Zealand dairy supply ramped up and good weather conditions were expected to support production over the coming summer months.
“On this basis, we look through the result overnight and expect that dairy prices are on the whole likely to remain soft over the next few months,” said Nathan Penny, senior rural economist at ASB Bank.