Fonterra sees further milk price recovery

Posted by Daniel Palmer on 2nd September 2009

The world’s largest dairy exporter continues to see signs of recovery in the dairy market following a tumultuous year during which prices plummeted.

Fonterra’s internet-based sales platform, globalDairyTrade, concluded its September trading event this morning with average prices for Whole Milk Powder surging 24.2%.

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$2,858 per tonne FAS (A$3463). This was US$557 (A$665) per tonne higher than the August event.

Kelvin Wickham, managing director, Fonterra Global Trade, said the lift was higher than expected. “However, we anticipated whole milk powder prices would lead the recovery because of low global inventories and firming demand.”

“With demand returning, our customers have more confidence in refilling their supply chains,” he added. “But it remains to be seen whether demand has returned to sustainable growth.”