Fonterra sees minor correction in dairy prices

Posted by Daniel Palmer on 6th January 2010

Global dairy giant Fonterra has seen the average price for Whole Milk Powder fall 7% via its monthly internet-based sales platform globalDairyTrade – halting a run of strong growth spanning five months.

The trading manager, CRA International, advised Fonterra this morning that the average price achieved across all contracts and contract periods for Whole Milk Powder (WMP) was US$3,309 per tonne FAS. This was US$251 per tonne lower than the December event. Prices ranged from US$3,230 per tonne FAS to US$3,555 per tonne FAS.

Milk splash

Paul Grave, globalDairyTrade manager, said this represented a minor correction after five months of price rises totalling 95%.

“This is one signal that the markets are now more closely in balance. The result is within the range of price movements we would expect to see in the current market environment,” he advised. “Consumer demand is returning and global supply remains tight.”

For Anhydrous Milk Fat (AMF), the average price achieved across all contracts and contract periods was US$4,539 per tonne FAS. This was US$190 per tonne, or 4%, higher than the December event.

Overall pricing decreased 5.5% across both AMF and WMP.