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Dairy prices rise for third time

NZN 18/04/2017 Margreet Dietz

Dairy product prices are up at Fonterra's GlobalDairyTrade auction, rising for the third time in a row and offering a boost to sentiment.

The GDT price index gained 3.1 per cent from the previous auction two weeks ago and the average price rose to $US3139 ($NZ4459). Some 22,927 tonnes of product was sold, up from 22,642 at the previous auction.

Whole milk powder (WMP) climbed 3.5 per cent to $US2998 a tonne.

A large volume of instant WMP sold at a lower price than the regular grade product, AgriHQ dairy analyst Susan Kilsby said in a note.

"It was unusual to see regular grade WMP selling at a premium to the higher specification product but we have seen a lot of strength in the futures market recently and it is the regular grade product this market settles against."

Skim milk powder (SMP) jumped 7.1 per cent to $US2044 a tonne.

"The GDT prices indicate there are buyers that are prepared to pay a premium to source SMP produced in New Zealand," Ms Kilsby said.

"Elsewhere in the world there is a glut of SMP but here we are successfully moving product and attaining good prices."

Cheddar rallied 6 per cent to $US3462 a tonne, butter increased 2.9 per cent to $US4892, while lactose added 1.2 per cent to $US935.

Meanwhile, rennet casein dropped 3.8 per cent to $US6020 a tonne, while anhydrous milk fat slipped 0.5 per cent to $US5930.

Butter milk powder sold at $US1720.

The New Zealand dollar last traded at US70.25 cents at 1.26pm in New York, compared with US70.08c at 5pm in Wellington on Tuesday.

There were 130 winning bidders out of 173 participating at the 14-round auction. The number of qualified bidders rose to 541, up from 537 at the previous auction.

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