Milk price signals turn positive: Fonterra

Posted by James Ferre on 5th August 2009

The August trading event for Fonterra’s internet-based sales platform has seen the price for Whole Milk Powder surge 25.8%, a sign that dairy markets are beginning on a recovery path.

The trading manager, CRA International, advised Fonterra that the average price achieved across all contracts and contract periods for Whole Milk Powder (WMP) was  US$472 (A$561) per tonne higher than the July event as US$2,031 per tonne (A$2,412).

Nigel Kuzemko, Director Commercial and Strategy at Fonterra Trade and Operations, said it was encouraging to see improved pricing which reflects a recent firming in market sentiment but warned that the international dairy market remains volatile – with supply and demand going through a rebalancing phase.

“We are seeing signs of strengthening demand and prices, and that’s encouraging, but the market remains dynamic with trends difficult to forecast,” he advised.

The August trading event included for the first time 1,000 tonnes of WMP from Fonterra’s Australian operations, which was part of the dairy firm’s objective to expand the range of products sold on globalDairyTrade.

“This will bring the same market price transparency for Australian product that globalDairyTrade trading events have established for New Zealand product,” Mr Kuzemko said.