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Dairy product prices eke out surprise gain

NZN 7/02/2017 Margreet Dietz

Dairy product prices have eked out a gain at Fonterra's GlobalDairyTrade auction, bucking expectations for a decline, as both whole and skim milk powder rose.

The GDT price index rose 1.3 per cent to $US3537 ($NZ4832) , up from $US3517 at the previous auction three weeks ago. Some 21,273 tonnes of product was sold, below the 22,030 tonnes at the previous auction.

Whole milk powder rose 1 per cent to $US3314 a tonne.

"Milk powder prices exceeded market expectations," AgriHQ dairy analyst Susan Kilsby said in a note.

Regular grade New Zealand-sourced whole milk powder supplied by Fonterra with an April delivery date was priced at $US3290 per tonne, $US90 above the price which the February WMP futures contract closed at on Tuesday, Ms Kilsby noted.

On Wednesday morning (NZT), lactose jumped 12.4 per cent to $US910 a tonne, while butter climbed 4.9 per cent to $US4593.

Anhydrous milk fat gained 4 per cent to $US5765, while skim milk powder inched 0.1 per cent higher to $US2608.

Demand for skim milk powder was considerably better than the 6-percent price fall anticipated by the NZX Dairy Derivatives market, Kilsby said.

Butter milk powder dropped 7.5 per cent to $US2254 a tonne, while cheddar fell 3.7 per cent to $US3798 a tonne, and rennet casein eased 0.4 per cent to $US6445.

There were 104 winning bidders out of 172 participating at the 12-round auction. The number of qualified bidders rose to 530, up from 526 at the previous auction.

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